Seoul moves to fold stablecoin rules into single crypto bill as tax fight brews
South Korea's FSC plans a consolidated digital asset law with stablecoin rules, as opposition lawmakers seek to scrap a 22% crypto tax due in 2027.
South Korea’s Financial Services Commission is preparing to consolidate its fragmented digital asset legislation into a single government-backed bill, according to a report by Edaily, as the country’s opposition simultaneously pushes to abolish a 22% crypto income tax before it takes effect in 2027. The dual-track development illustrates how Seoul’s regulators and lawmakers are racing to settle the legal architecture for stablecoins and exchanges even as the tax question remains unresolved.
A single framework for a crowded legislative field
The FSC has told the National Assembly it intends to draft a consolidated Digital Asset Basic Act together with the ruling Democratic Party, Edaily reported on Wednesday. The proposal would cover stablecoin issuance and circulation, digital asset business licensing, exchange entry requirements, disclosure obligations, internal controls and system-resilience standards — effectively bundling rules that have so far been scattered across ten separate bills already pending in parliament.
That fragmentation has been blamed for repeated delays in finalising South Korea’s second-stage crypto legislation. A single government-ruling party text would give negotiators a common starting point, though the FSC has not said when or in what form the bill will be introduced.
Two disputes remain central to the drafting process: whether issuers of won-denominated stablecoins should be required to be majority bank-owned, and whether ownership limits should be imposed on major cryptocurrency exchanges. Both questions touch on the balance of power between incumbent financial institutions and crypto-native platforms, a tension familiar to European regulators who have wrestled with similar issues under MiCA’s own-funds and governance requirements.
Opposition presses to scrap the 2027 tax
Separately, the National Assembly’s Finance and Economic Planning Committee was scheduled to table a bill on Wednesday that would repeal South Korea’s crypto income tax before it comes into force on 1 January 2027. The amendment, introduced on 19 March by People Power Party lawmaker Song Eon-seok, would delete the provision taxing income from transferring or lending digital assets.
Once tabled, the bill is expected to move to the committee’s tax subcommittee for detailed review, according to Edaily. A separate repeal petition backed by more than 50,000 signatories is also due before a petitions subcommittee, though neither body has yet been fully constituted and no review dates have been fixed.
Under the existing schedule, annual crypto income from transfers or lending above 2.5 million won — roughly $1,700 — will be taxed at 20%, plus a 2% local income tax, for a combined 22% rate from January 2027. The government and the Democratic Party have backed proceeding with the tax, while opposition figures argue it is inequitable given that most retail stock investors remain exempt from equivalent levies. The Finance Ministry confirmed on 7 May that the tax would go ahead despite earlier postponements.
What it signals for investors
The parallel tracks underscore a broader pattern in South Korean crypto policy: structural market rules and fiscal treatment are being negotiated on separate, uncoordinated timelines. For stablecoin issuers and exchanges eyeing the won market, the outstanding questions over bank ownership and concentration limits carry more immediate commercial weight than the tax dispute, since they determine who is even permitted to operate. Investors and platforms alike will be watching whether the consolidated bill emerges before, or after, the tax subcommittee reaches its own conclusions.
Read more: Bank of Russia drafts first rules for licensed crypto trading venues
