South Korea Advances Stablecoin Rules as Opposition Pushes Crypto Tax Repeal

The Financial Services Commission (FSC) is reportedly preparing a government-backed digital asset bill covering stablecoins and cryptocurrency exchanges, while opposition lawmakers are pushing to repeal a planned 22% crypto tax scheduled to take effect in 2027.

South Korea’s Financial Services Commission (FSC) is reportedly preparing a consolidated Digital Asset Basic Act in cooperation with the ruling Democratic Party, providing lawmakers with a government-backed proposal covering stablecoins and the broader cryptocurrency market after months of delays.

According to an Edaily report published Wednesday, the FSC informed the National Assembly before a policy briefing that it plans to introduce a unified digital asset bill. The proposed legislation would reportedly address stablecoin issuance and circulation, rules for digital asset businesses, exchange licensing requirements, disclosure obligations, internal controls, and system resilience standards.

A unified proposal backed by the government and the ruling party could establish a central framework for negotiations. Currently, 10 separate bills covering digital assets and stablecoins remain under consideration in Parliament, while ongoing disagreements have delayed key aspects of South Korea’s second phase of crypto legislation.

The FSC has not yet finalized the timing or process for introducing the consolidated bill. Major disagreements remain over whether issuers of won-denominated stablecoins should be majority-owned by banks and whether ownership limits should be imposed on major cryptocurrency exchanges.

Opposition’s Crypto Tax Repeal Bill Moves Toward Legislative Review#

Separately, the National Assembly’s Finance and Economic Planning Committee was scheduled to consider an opposition-backed bill on Wednesday that seeks to abolish South Korea’s crypto income tax before its planned implementation on Jan. 1, 2027.

The amendment to the Income Tax Act was introduced on March 19 by People Power Party lawmaker Song Eon-seok. The proposal seeks to remove the provision that taxes income generated from the transfer or lending of digital assets. According to Edaily, the bill is expected to be referred to the committee’s tax subcommittee for further review.

A separate petition calling for the repeal of the tax, supported by more than 50,000 people, is also expected to be reviewed by a petitions subcommittee. However, neither subcommittee has been fully established, and no dates have been scheduled for their review.

Beginning on Jan. 1, 2027, income earned from transferring or lending cryptocurrency that exceeds 2.5 million won (about $1,700) per year is scheduled to be taxed at 20%, along with an additional 2% local income tax.

The government and ruling Democratic Party favor moving ahead with the tax, while opposition lawmakers argue that taxing crypto income while most regular stock investors remain exempt creates an unfair system. On May 7, the Finance Ministry confirmed that the tax plan would move forward after facing multiple delays.