A service that issues credit cards in exchange for cryptocurrency deposits is rapidly spreading in South Korea, but Korean financial authorities have yet to grasp the full scope of the trend, prompting urgent calls for regulatory reform.

According to sources from the virtual asset industry on Thursday, the number of Korean users adopting RedotPay increased significantly, as it can be used freely anywhere in the world by depositing stablecoins such as Tether’s USDT and Circle’s USDC, or cryptocurrencies such as Bitcoin and Ethereum, and the issuance process is simple.

RedotPay is a payment solution company based in Hong Kong and issues cards when users deposit virtual assets.

“I converted part of my crypto investment into stablecoins, and can conveniently use them in my spending,” a RedotPay user said.

RedotPay already has around 3 million users worldwide, according to KPMG Samjong Accounting Corp.

The issue is that RedotPay cards are issued solely based on crypto collateral, without taking the user’s nationality, identity, or creditworthiness into account.

It is also difficult for Korean financial authorities to track how stablecoins are used once they are transferred overseas.

“The United States, the European Union, and Japan are all establishing regulatory frameworks for stablecoins,” Shin Sang-hee, a senior research fellow at Hana Institute of Finance, said. “Korea must address this regulatory gap as a matter of urgency to protect users and foster a healthy industry.”

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