Korea Unveils Comprehensive Crypto Rules Amid Ongoing Tax Dispute

South Korea is taking a major step towards comprehensive crypto rules by merging 10 pending bills into a single framework. The proposed Digital Asset Basic Act will cover stablecoins, trading platforms, disclosure rules, internal controls, and system resilience. This broader regulatory framework goes beyond the current Virtual Asset User Protection Act, which mainly focuses on custody, unfair trading, and consumer safeguards.

The planned law would regulate issuers, service providers, and the wider market structure, including standards for exchange access and operational security. However, several major issues remain unresolved, such as whether won-backed stablecoin issuers should be controlled by bank-led consortiums holding at least 50% plus one share. The Bank of Korea favors a leading role for banks due to potential risks to monetary and financial stability.

The government is also pushing forward with a planned 22% tax on crypto income above 2.5 million won, set to begin on January 1, 2027. However, the opposition People Power Party has introduced an amendment seeking to remove the tax provisions for income from transferring or lending digital assets. Supporters argue that taxing retail crypto gains while many individual stock gains remain exempt creates unequal treatment.