South Korea to draft stablecoin rules as crypto tax repeal faces delays
South Korea’s Financial Services Commission (FSC) reportedly plans a consolidated Digital Asset Basic Act covering stablecoin issuance and circulation, exchange entry requirements, disclosures, internal controls and system-resilience standards. The FSC is said to work with the ruling Democratic Party after months of delays, as 10 separate digital asset and stablecoin bills remain pending in Parliament.
Key disputes could affect market structure: whether won-denominated stablecoin issuers must be majority bank-owned and whether ownership limits should apply to major crypto exchanges. The FSC has not yet set a timeline for introducing the consolidated stablecoin rules.
Meanwhile, an opposition-backed bill seeks to repeal South Korea’s crypto income tax before it takes effect on 1 Jan 2027. The proposal would remove tax on income from transferring or lending digital assets. It is scheduled for committee review, but subcommittees have not been fully formed and no review dates are set.
Under the current plan, crypto transfer/lending income above 2.5 million won (about $1,700) annually faces a 20% income tax plus a 2% local tax. The government and the ruling party support the tax, while opposition argues it is unfair because many stock investors remain exempt.
Neutral
This is a mixed regulatory headline rather than a clear policy “win” for either bulls or bears. On one hand, the FSC’s planned consolidated stablecoin rules could improve clarity for issuance, exchange operations, and compliance expectations—often supportive for institutional participation and could reduce regulatory risk over time. On the other hand, major design disputes (bank-majority ownership for won stablecoin issuers; exchange ownership limits) remain unresolved, and the rollout timeline is not set.
Tax repeal efforts add another layer of uncertainty. While an opposition bill to remove the 2027 crypto income tax is moving toward committee review, the subcommittees aren’t fully constituted and no dates are confirmed. That means traders may not see an immediate catalyst, but rather continued headline risk. In prior cycles, when tax or stablecoin legislation is in “process” (committee delays, unclear implementation), the market typically trades the uncertainty range—reacting to headlines but lacking durable trend follow-through until a final vote or effective date is confirmed.
Net: near-term volatility could occur on political/committee updates, but medium-to-long-term impact likely depends on whether the stablecoin rules become final and whether the 2027 tax repeal actually passes.