South Korea Moves Ahead on Crypto Rules as Tax Repeal Clears Panel

South Korea’s Financial Services Commission (FSC) is reportedly preparing to consolidate fragmented crypto rules into a single, government-backed legislative package in coordination with the ruling Democratic Party, according to an Edaily report published Wednesday. The move comes after months of delays and renewed uncertainty over how stablecoins and the broader digital-asset market will be regulated under the country’s next phase of crypto legislation.

Separately, lawmakers are also set to consider an opposition proposal to repeal the planned crypto income tax before it takes effect in 2027—an effort that could become another flashpoint in South Korea’s evolving policy debate around digital assets.

Key takeaways

• The FSC reportedly plans to work with the ruling Democratic Party on a consolidated Digital Asset Basic Act covering stablecoins and wider market conduct.
• South Korea currently has multiple separate bills pending in Parliament, but unresolved disagreements have delayed progress on its second-stage crypto framework.
• Major outstanding disputes include whether won-denominated stablecoin issuers must be majority bank-owned and whether limits should apply to ownership of major crypto exchanges.
• An opposition bill aims to abolish South Korea’s planned crypto income tax prior to its Jan. 1, 2027 start, and is expected to move to committee review.

A consolidated Digital Asset Basic Act enters the policy lane

According to Edaily, the FSC told the National Assembly ahead of a policy briefing that it intends to introduce a single consolidated bill rather than continue advancing a patchwork of proposals. The rationale, as implied by the report, is to create one central framework that lawmakers can negotiate against—potentially reducing the gridlock created by overlapping and separate draft measures.

The proposed framework would reportedly address a broad set of issues that have become common regulatory themes in South Korea’s digital-asset discussions. Edaily reports that the consolidation would cover stablecoin issuance and circulation, rules for digital-asset businesses, exchange entry requirements, disclosure obligations, internal controls, and system-resilience standards.

At present, 10 separate digital asset and stablecoin bills are already pending in Parliament. The same Edaily reporting indicates disagreements have blocked progress on crucial components of South Korea’s second-stage crypto legislation—leaving stakeholders without a clear, unified rulebook.

Disputes that could determine the shape of stablecoin regulation

While the FSC has not finalized timing or the exact form of how the consolidated bill will be introduced, Edaily points to specific disagreements that remain unresolved. Two issues stand out as likely to shape the final outcome.

First, the debate over whether won-denominated stablecoin issuers should be majority owned by banks remains unsettled. That question has direct implications for how stablecoin risk and reserve oversight would be structured, and whether issuance would effectively be channeled through institutions already embedded in South Korea’s financial system.

Second, lawmakers are also divided on whether ownership limits should apply to major crypto exchanges. That dispute matters for market concentration and conflicts of interest—particularly if exchange-linked entities can influence the stablecoin ecosystem or market access rules.

Because these decisions are described as unresolved, the consolidated approach may not immediately resolve uncertainty for market participants. Instead, it could shift negotiations from parallel bills into a single legislative vehicle—making the eventual compromises more visible, but not necessarily faster.

Opposition seeks to scrap the crypto income tax before it starts

While stablecoin and exchange regulation appears to be moving toward consolidation, South Korea’s tax policy is also entering a new round of legislative scrutiny. Separately, Edaily reported that the National Assembly’s Finance and Economic Planning Committee was scheduled to table an opposition bill on Wednesday aimed at abolishing South Korea’s crypto income tax before its planned Jan. 1, 2027 implementation.

The Income Tax Act amendment was introduced on March 19 by People Power Party lawmaker Song Eon-seok, according to earlier coverage from Cointelegraph. The proposal seeks to delete a provision that would tax income derived from transferring or lending digital assets. After being tabled, Edaily reports that the bill is expected to be sent to the committee’s tax subcommittee for detailed consideration.

In parallel, a separate repeal petition backed by more than 50,000 people is expected to go before a petitions subcommittee, though Edaily notes that neither subcommittee has been fully constituted and no review dates have been set.

What the tax schedule says—and why the repeal fight matters

The planned taxation framework starts on Jan. 1, 2027. As described in the source reporting, income from transferring or lending crypto exceeding 2.5 million won (about $1,700) annually is set to face a 20% income tax plus a 2% local income tax.

Support for implementing the tax has been attributed to the government and the ruling Democratic Party, while the opposition’s position is that taxing crypto income while most ordinary stock investors remain exempt is unfair. In May, the Finance Ministry indicated the tax would proceed after repeated delays, as noted in Cointelegraph coverage, underscoring that the issue is not simply theoretical—it is tied to a concrete start date.

From an investor and market-structure standpoint, the repeal effort is significant because tax rules can influence participation patterns, custody and lending behavior, and how users route activity between exchanges and other venues. It can also affect how issuers and intermediaries plan compliance and reporting, especially when rules are introduced in advance of a hard start date.

What to watch next in South Korea’s crypto policy churn

For now, the most immediate developments are legislative: whether the FSC’s consolidated Digital Asset Basic Act framework moves from briefing to formal proposal, and how the opposition’s tax repeal bill progresses through the committee process. Readers should watch how the unresolved stablecoin disputes—bank-ownership requirements for won-denominated issuers and any exchange ownership limits—are ultimately translated into a single bill, while also tracking whether the crypto tax debate stays on course for 2027 or gains enough momentum to change its trajectory.