Korea Set to Tax Stablecoin Gains on Payments as Crypto Levy Nears
South Korea's government is moving forward with its plan to tax cryptocurrency income starting next year. The new rule will apply to gains on all cryptocurrencies, including stablecoins like Tether (USDT). If a stablecoin is used for payment and its value has increased since it was acquired, the difference between the two values will be considered taxable income.
The current framework does not distinguish between stablecoins used for payments and those held as investments. This has led to calls for a revision of the tax code to account for the growing use of stablecoins in everyday transactions.
According to Lee Hyung-il, the nominee for deputy prime minister and minister of economy and finance, specific standards for the taxation of cryptocurrency income will be announced through a National Tax Service public notice within the year.
The tax structure was designed in 2020, before the rapid growth of stablecoins, staking, decentralized finance (DeFi), and real-world assets (RWA) in the market. Market participants agree that crypto income should be taxed but say the current framework cannot properly capture a market that has changed rapidly.