South Korea’s Financial Services Commission will draft a consolidated Digital Asset Basic Act with the ruling Democratic Party, covering stablecoin issuance, exchange licensing and disclosure rules, while an opposition bill to scrap the country’s 22% crypto tax has reached a National Assembly committee. The FSC told the National Assembly ahead of a policy briefing that it intends to introduce the consolidated proposal, according to an Edaily report. Ten separate digital asset and stablecoin bills are currently pending in Parliament, and disagreements have kept Seoul from settling key parts of its second-stage crypto legislation for months.
The proposed law would cover stablecoin issuance and circulation, business rules for digital asset firms, exchange entry requirements, disclosures, internal controls and system-resilience standards. The FSC has not finalized when or how the bill will be introduced. Two disputes remain the main blockers: whether issuers of won-denominated stablecoins should be majority bank-owned, and whether ownership limits should apply to the country’s major crypto exchanges.
Tax repeal heads to committee
Separately, the National Assembly’s Finance and Economic Planning Committee was scheduled to review an opposition bill that would abolish the crypto income tax before it takes effect on January 1, 2027. People Power Party lawmaker Song Eon-seok introduced the Income Tax Act amendment on March 19. It deletes the provision taxing income from transferring or lending digital assets. The bill is expected to go to the committee’s tax subcommittee for detailed work.
A repeal petition backed by more than 50,000 people is also expected to reach a petitions subcommittee. Neither subcommittee has been fully constituted, and no review dates have been set, so the repeal effort remains in early stages. The committee itself has urged caution on abolition, signaling that the repeal faces an uphill path even before floor votes.
From January 1, 2027, income from transferring or lending crypto above 2.5 million won, about $1,700, will face a 20% tax plus a 2% local income tax. Losses cannot be carried forward to offset future gains. Deputy Prime Minister Koo Yun-cheol has confirmed the tax will proceed as scheduled after three earlier delays. The government and the ruling party support it. The opposition argues that taxing crypto while most ordinary stock investors remain exempt from capital gains tax is unfair.
What the tax means in practice
The threshold is low by local standards. A salaried worker who put 5 million won into bitcoin and gained 30% would owe nothing, since the 1.5 million won profit sits under the limit. Gains above 2.5 million won are taxed at the flat rate immediately, with no bracket structure. Because losses cannot offset gains across years, a trader who earns 1 million won and loses 800,000 won in the same year still owes tax on the net 200,000 won.
Exchanges are preparing for reporting duties. Upbit and Bithumb will link real-name accounts to the tax authority so gains can be tracked directly. The National Tax Service will also start receiving overseas crypto account data in 2027 under international reporting arrangements, tightening disclosure requirements for holdings above 5 billion won. Critics, including some lawmakers, argue the tax should wait until the OECD’s Crypto-Asset Reporting Framework is fully operational so enforcement matches the data available.
Why the consolidated bill matters
Korea is one of the world’s largest crypto markets, with roughly 15 million investors holding digital assets through domestic exchanges. The fragmented legislative landscape has left exchanges, stablecoin issuers and banks negotiating against an uncertain rulebook. A government-backed consolidated bill would give lawmakers a central framework for negotiations instead of ten competing proposals.
The stablecoin question carries weight beyond crypto. Korean policymakers have watched dollar-pegged tokens absorb trading volume on domestic platforms and see a won-pegged alternative as a matter of monetary sovereignty. Recent market behavior has not helped that case. When the yen stablecoin JPYC listed on Upbit, it traded as much as 300% above its peg, and Korean data later showed more than 21,000 buyers paid premiums above 10%. A consolidated law with issuer and circulation rules is partly a response to that kind of disorder.
Whether issuers must be majority bank-owned is the sharpest disagreement. Banks want the mandate, arguing that stablecoin reserves demand supervised custodians. Crypto firms argue it would concentrate control in institutions with little experience running token systems. Ownership limits on exchanges are contested for similar reasons.
Timeline pressure
The tax takes effect in just over a year, and reporting infrastructure must be live by then. If the consolidated bill slips past the autumn session, Korea risks running a strict tax regime alongside an unfinished market framework, an inversion of the usual sequence where rules precede levies. The FSC has given no date for its draft.
For traders, the near-term picture is mixed. A repeal bill in committee is not a repeal, and the finance committee has urged caution on abolition. But the political fight itself creates uncertainty: investors face a 22% levy on gains above a low threshold while lawmakers debate whether the levy should exist at all. Some local commentary has already advised investors to realize gains before the end of 2026 and to watch the repeal petition’s progress as a possible reversal signal.
Korea has delayed this tax three times since 2022, each time citing market readiness. The fourth delay now depends on whether the opposition can move its bill through two unconstituted subcommittees before the calendar runs out.