South Korea plans stablecoin rules as opposition pushes crypto tax repeal The FSC reportedly plans a government-backed digital asset bill covering stablecoins and exchanges, while opposition lawmakers seek to scrap a 22% crypto tax due in 2027.

South Korea’s Financial Services Commission (FSC) is reportedly working with the ruling Democratic Party to draft a consolidated Digital Asset Basic Act. This government-backed proposal aims to create a unified legal framework for the cryptocurrency market, addressing stablecoin issuance and circulation, digital asset business regulations, exchange entry requirements, disclosures, internal controls, and system-resilience standards. The move comes after months of delays and amid the current situation where 10 separate digital asset and stablecoin bills are pending in Parliament, with disagreements stalling progress on the second phase of crypto legislation. Key unresolved issues include whether stablecoin issuers should be majority bank-owned and if ownership limits should apply to major crypto exchanges. The timing and introduction plan of this consolidated bill have not yet been finalized.

In a separate development, opposition lawmakers have introduced a bill aimed at repealing South Korea’s planned crypto income tax, which is set to take effect on January 1, 2027. The tax would impose a 20% rate plus a 2% local income tax on crypto income exceeding 2.5 million won (around $1,700) annually from transferring or lending digital assets. The repeal bill was introduced on March 19 by People Power Party lawmaker Song Eon-seok and is expected to be referred to a tax subcommittee for review once it is tabled. Additionally, more than 50,000 citizens have backed a petition seeking to revoke the tax, which is also due for consideration by a petitions subcommittee. However, neither subcommittee has been fully formed, and no review dates have been scheduled.

The government and ruling Democratic Party support moving forward with the crypto tax, citing the Finance Ministry’s announcement on May 7 that the tax would proceed after multiple delays. The opposition, however, contends that imposing taxes on cryptocurrency income while many ordinary stock investors remain exempt is unfair. Together, these legislative efforts highlight ongoing debates in South Korea over how best to regulate and tax digital assets, reflecting tensions between fostering innovation and ensuring fair taxation.