The South Korean National Assembly’s Finance Committee has scheduled discussions on an amendment to repeal the cryptocurrency tax before it takes effect on January 1, 2027. The tax levies a 20% national tax plus a 2% local tax on crypto gains exceeding 2.5 million won annually. This combined 22% levy has a lengthy history, having been postponed three times from its initial 2022 schedule.
Pressure for the repeal has emerged from multiple sides. Lawmaker Song Eon-seok of the opposition People Power Party (PPP) introduced a tax abolition amendment via Bill No. 2217609 on March 19. The opposition argues the tax is unfair since retail stock investors generally face no comparable levy. Public support has surged through an online petition gathering over 50,000 signatures, which now awaits committee review. The justification for the tax faced further headwinds after the KOSPI index plunged more than 7%, dampening market sentiment toward additional taxes. However, the government and the ruling Democratic Party continue to back implementing the regulation on schedule.
Consolidation of Ten Bills
Beyond taxation, the industry regulatory framework is also gearing up for an overhaul. The Financial Services Commission (FSC) plans to draft a consolidated Digital Asset Basic Act in cooperation with the Democratic Party. Announced ahead of a policy briefing on July 29, 2026, the initiative aims to unite 10 separate digital asset and stablecoin bills currently pending before the National Assembly.
The proposed legislation is set to cover extensive ground. The framework encompasses standards for stablecoin issuance and circulation, operational definitions for digital asset businesses, and stringent listing requirements. Supervisory elements such as disclosure requirements, internal control systems, and system resilience standards are also on the agenda. All regulations currently remain in the legislative pipeline. The FSC has yet to finalize the draft language or announce a definitive timeline for submission to parliament, meaning no formal legal changes have taken effect.
Who Controls Stablecoins?
One issue has sparked sharp controversy in drafting the new rules: who should hold control over won-pegged stablecoins. The debate centers on a requirement that stablecoin issuers be directly controlled by a banking consortium via a minimum ownership threshold of 50% plus one share.
The Bank of Korea fully supports a leading role for the central bank and banking institutions in stablecoin circulation, arguing the measure is essential to safeguard the country’s monetary and financial stability. For domestic crypto industry players, the mandate sharply restricts their playing field. If banking consortiums secure majority control, digital asset firms must either share their market share with banks or risk being squeezed out of the local digital currency market.
Reported via crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
