South Korea is drafting strict stablecoin rules. At the capitol, the Financial Services Commission (FSC) joined the Democratic Party to frame a Digital Asset Basic Act. They want to govern coin issuance and exchange operations. But severe political division has frozen the timeline.
The Finance and Economic Planning Committee is reviewing a separate amendment right now. Lawmaker Song Eon-seok submitted a bill to kill the country’s upcoming digital asset income tax before it takes effect.
South Korea currently manages an estimated 13 to 13.26 million retail crypto investors. The FSC informed lawmakers it will propose a consolidated regulatory framework that covers system resilience and internal exchange controls. Nobody knows exactly when they will formally introduce the bill they are working on. Ten separate digital asset bills sit pending in Parliament. And lawmakers still argue over whether won-denominated stablecoin issuers require majority bank ownership.
Debate over the planned 22 percent tax exposes broader economic tension. Under current law, digital asset investors will pay a 20 percent income tax and a 2 percent local tax on profits that exceed 2.5 million won ($1,650 to $1,800). Politicians previously delayed the rollout from January 2025 after they struck a bipartisan agreement. The first filings are set for May 2028.
Retail traders despise the tax. A public petition that demands immediate cancellation recently surpassed 52,000 signatures to reach the National Assembly. Critics argue the government unfairly targets digital traders. Officials previously scrapped the financial investment tax on stock gains due to fears of a market downturn. Stock traders secured a massive exemption. That is exactly the treatment crypto investors are asking for.
So the Ministry of Economy and Finance continues to defend its 2027 rollout. Officials state that the 20 percent separate taxation rate is highly favorable compared to standard income brackets. They dismissed double taxation concerns entirely. Authorities flagged that VAT on exchange fees covers a completely separate operational area from capital gains.
The National Tax Service is currently coordinating with five major exchanges—Upbit, Bithumb, CoinOne, Korbit, and Gopax—to build mandatory reporting systems before the 2027 enforcement begins. Authorities also plan to draft separate taxation standards for specific income streams. The upcoming rules will target network airdrops, staking rewards, and digital asset lending.
National Tax Service Enforcement Threatens Retail Liquidity
Coordination between the NTS and top exchanges like Upbit and Bithumb indicates a hardline approach to user data collection. If lawmakers refuse to pass Song Eon-seok’s repeal amendment, South Korea’s retail liquidity pool will likely shrink. Staking and airdrop taxation introduces severe compliance hurdles. Everyday users don’t want to deal with complex reporting software. They will simply reduce their on-chain activity to avoid audits entirely.