Korea Consolidates Crypto Rules Amid Tax Repeal Debate

South Korea's Financial Services Commission (FSC) is moving to consolidate fragmented crypto rules into a single legislative package. This comes after months of delays and uncertainty over how stablecoins and digital assets will be regulated in the country.

The FSC plans to work with the ruling Democratic Party on a consolidated Digital Asset Basic Act covering stablecoin issuance and wider market conduct. The bill aims to address issues such as stablecoin risk, reserve oversight, exchange entry requirements, disclosure obligations, internal controls, and system-resilience standards.

However, disagreements remain over whether won-denominated stablecoin issuers should be majority owned by banks and whether ownership limits should apply to major crypto exchanges. These disputes could shape the final outcome of the consolidated bill.

In a separate development, lawmakers are considering an opposition proposal to repeal the planned crypto income tax before it takes effect in 2027. The tax was introduced earlier this year and is set to impose a 20% income tax on income from transferring or lending digital assets exceeding 2.5 million won (approximately $1,700) annually.