South Korea is taking another step toward strengthening its cryptocurrency regulations as the Financial Services Commission (FSC) works with the ruling Democratic Party to draft a comprehensive Digital Asset Basic Act.
The proposed legislation aims to establish a unified legal framework for the country’s digital asset industry after months of delays in passing cryptocurrency-related laws.
According to news reports, the bill would regulate stablecoin issuance and circulation, digital asset businesses, and cryptocurrency exchanges.
It is also expected to include rules on exchange of entry requirements, disclosure of obligations, internal controls, and system resilience.
With 10 separate digital asset and stablecoin bills already pending in parliament, the government hopes that a single, consolidated proposal will provide a clearer foundation for discussions and help modernize South Korea’s cryptocurrency regulatory framework.
Key Policy Disputes Still Unresolved
Although the FSC is preparing a unified proposal, lawmakers have yet to reach agreement on several major policy issues.
One of the main debates is whether issuers of Korean won-backed stablecoins should be required to be majority-owned by banks. Another unresolved issue is whether ownership restrictions should be placed on large cryptocurrency exchanges.
These disagreements have delayed the country’s second-stage cryptocurrency legislation, leaving several important regulatory questions unanswered.
The FSC has confirmed its intention to introduce a consolidated bill, but it has not announced when the proposal will be submitted or how the remaining policy differences will be resolved.
The outcome of these discussions is expected to play a significant role in shaping South Korea’s future digital asset market.
Opposition Pushes to Eliminate Planned Crypto Tax
At the same time, lawmakers are debating the future of South Korea’s planned cryptocurrency income tax.
The National Assembly is reviewing an amendment introduced by People Power Party Lawmaker Song Eon-seok that would repeal the tax before its scheduled implementation on January 1, 2027.
Under the current Income Tax Act, annual income from transferring or lending digital assets exceeding 2.5 million won (about $1,700) would be subject to a 20% tax plus a 2% local income tax.
While the ruling Democratic Party and the Finance Ministry continue to support implementing the tax as planned, opposition lawmakers argue that it is unfair to tax cryptocurrency investors while many ordinary stock investors remain exempt.
A separate public petition supporting the repeal has also gained more than 50,000 signatures and is expected to be reviewed by the National Assembly, although no timetable has been announced.
