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South Korea’s Financial Services Commission reportedly plans to prepare a consolidated Digital Asset Basic Act with the ruling Democratic Party, creating a government-backed framework for stablecoins and crypto businesses.
The regulatory push is unfolding alongside a separate effort by the opposition People Power Party to abolish a 22% tax on crypto income before it takes effect on January 1, 2027.
New Framework Could Replace 10 Pending Crypto Bills
The FSC’s planned legislation would cover stablecoin issuance and circulation, digital asset business rules, exchange entry requirements, disclosures, internal controls and operational resilience.
Ten separate digital asset and stablecoin proposals are already pending in the National Assembly. A joint government and ruling-party bill could become the main text used to negotiate South Korea’s second-stage crypto rules.
The current Virtual Asset User Protection Act focuses mainly on custody, unfair trading and customer safeguards. The next framework is intended to regulate issuers, exchanges and market infrastructure in greater detail. The FSC has not announced when the consolidated bill will be submitted.
Bank Control of Won Stablecoins Remains Unresolved
One of the main disputes is who should be permitted to issue won-denominated stablecoins. The Bank of Korea has backed a bank-led model because of concerns about monetary and financial stability.
A reported government proposal would require banks to hold at least 50% plus one share in stablecoin-issuing consortiums. Crypto companies and some lawmakers have supported allowing qualified non-bank issuers to compete under licensing, reserve and redemption requirements.
Exchange Ownership and Security Rules Remain Open
Lawmakers must also settle whether ownership limits should apply to large crypto exchanges. Security and compensation standards for operators are another unresolved issue.
Those questions will determine how far the new framework moves beyond the existing user-protection law.
They will also shape whether stablecoin issuance remains centered on banks or opens to a wider group of licensed issuers.
Opposition Bill Seeks to Scrap 22% Crypto Tax
People Power Party lawmaker Song Eon-seok introduced legislation on March 19 that would remove provisions taxing income from transferring or lending digital assets. Under current law, annual crypto income above 2.5 million won will face a 20% national tax plus a 2% local income tax from January 1, 2027.
Implementation has already been delayed three times from its original 2022 start date. The opposition argues that taxing crypto investors while many ordinary stock investors remain exempt creates unequal treatment. A separate petition seeking repeal has collected more than 50,000 signatures.
January 1, 2027 Tax Start Remains the Default
The government and ruling Democratic Party continue to support implementation. Unless lawmakers approve the repeal bill or another postponement, the 22% tax will begin on January 1, 2027.
That means South Korea’s crypto industry faces two parallel policy tracks: tighter stablecoin and exchange rules, and a renewed fight over investor taxation. The next confirmed step is whether the FSC and ruling party submit a consolidated Digital Asset Basic Act as negotiations over the tax repeal continue.
