South Korea Aims for Consolidated Crypto Legislation Amid Tax Repeal Push

South Korea's Financial Services Commission (FSC) is planning to draft a consolidated Digital Asset Basic Act, which will cover stablecoins and the broader cryptocurrency market. The proposal aims to provide a central framework for negotiations on key elements of second-stage crypto legislation.

The FSC has not finalized when or how the consolidated bill will be introduced. Key disputes remain over whether won-denominated stablecoin issuers should be majority bank-owned and whether ownership limits should apply to major crypto exchanges.

Separately, an opposition bill that would abolish South Korea's crypto income tax is set to go before a petitions subcommittee. The Income Tax Act amendment, introduced by People Power Party lawmaker Song Eon-seok on March 19, aims to delete the provision taxing income from transferring or lending digital assets.

The government and ruling Democratic Party support implementing the tax, while the opposition argues that taxing crypto while most ordinary stock investors remain exempt is unfair. From January 1, 2027, income from transferring or lending crypto exceeding 2.5 million won (about $1,700) annually will face a 20% tax plus a 2% local income tax.