Summary
South Korea's Financial Services Commission (FSC) plans to draft a consolidated Digital Asset Basic Act with the ruling Democratic Party, merging 10 pending bills into a single government-backed framework covering stablecoins, exchange entry requirements, disclosures, internal controls, and system-resilience standards. Separately, the National Assembly's Finance Committee is scheduled to table an opposition bill that would abolish South Korea's 22% crypto income tax before its January 1, 2027 implementation. Key disputes remain over whether won-denominated stablecoin issuers should be majority bank-owned and whether ownership limits should apply to major exchanges.
Key Facts
- FSC plans consolidated Digital Asset Basic Act with ruling Democratic Party
- 10 separate digital asset and stablecoin bills currently pending in National Assembly
- Proposed coverage: stablecoin issuance/circulation, exchange entry requirements, disclosures, internal controls, IT security
- Key disputes: bank majority ownership of won stablecoin issuers (51% rule), 15-20% equity ownership limits on major exchanges
- Opposition bill to abolish 22% crypto income tax (scheduled for committee review)
- Tax: 20% + 2% local income tax on crypto gains exceeding 2.5M won (~$1,700) annually
- Government/ruling party supports implementing the tax; opposition argues unfair vs stock investors
- FSC also reviewing guidelines to expand corporate participation in crypto market
- FSC Chairman Lee Won-geon presenting second-half policy agenda to National Assembly
- FSC aims to complete legislation by end of 2026
- 2027 pilot planned for tokenized government bonds linked to BOK CBDC platform
Why It Matters
South Korea's crypto regulatory landscape is at a critical juncture. The FSC's push for a unified Digital Asset Basic Act could provide the legal clarity that Korea's crypto industry has been waiting for since the first-phase legislation (Virtual Asset User Protection Act) took effect in 2024. The stablecoin rules are particularly significant given Korea's active won-denominated stablecoin pilots (Coupang/Woori). The tax debate adds political complexity: the opposition's repeal push has 50,000+ petition signatures, while the government insists the tax will proceed after repeated delays. The outcome will shape whether Korea becomes a leading regulated crypto market or drives activity offshore.