South Korea Moves to Consolidate Crypto Law as Tax Repeal Debate Intensifies
The Financial Services Commission plans a unified Digital Asset Basic Act while lawmakers clash over the 2027 income tax implementation.
South Korea is moving toward a unified regulatory framework for digital assets, even as lawmakers debate whether to scrap the country's planned cryptocurrency income tax before it takes effect in 2027.
The Financial Services Commission (FSC) announced plans to draft a consolidated Digital Asset Basic Act in collaboration with the ruling Democratic Party, aiming to streamline the fragmented landscape of stablecoin and cryptocurrency regulations. The proposal would cover stablecoin issuance and circulation, digital asset business rules, exchange entry requirements, disclosures, internal controls and system-resilience standards, according to an Edaily report cited by Cointelegraph.
The new legislation will emerge from 13 proposals currently slated for debate in the National Assembly, replacing the patchwork of competing bills that have stalled progress on what officials call "second-stage" crypto regulation.
Tax Fairness Dispute
Parallel to the regulatory push, the National Assembly's Finance and Economic Planning Committee is reviewing an opposition-led bill to abolish the planned crypto income tax before its January 1, 2027 implementation date.
The proposed tax would apply a 20% levy plus a 2% local tax on annual cryptocurrency gains exceeding 2.5 million won (approximately $1,700). While the government and ruling party have generally supported moving forward with the tax, opposition lawmakers argue it creates an unfair burden on crypto investors while many stock market investors remain exempt from similar capital gains taxation.
Why It Matters
The dual-track legislative effort addresses two critical uncertainties facing one of the world's most active cryptocurrency markets. A consolidated bill could provide the regulatory clarity needed for institutional participation and potentially enable the launch of official won-backed stablecoins, which have been held back by ambiguous legal status.
Meanwhile, the tax question affects retail investors who have faced years of shifting deadlines and policy reversals. South Korea has repeatedly postponed crypto taxation as the market matured, with the 2027 date representing the latest target after multiple delays.
The outcome of both initiatives will likely determine whether South Korea can position itself as a regulated hub for digital asset innovation or continue grappling with the legislative fragmentation that has characterized its crypto policy for years.