South Korea Aims for Stablecoin Rules as Crypto Tax Repeal Pushed
Vexoda Newsroom
The Financial Services Commission in South Korea plans to draft a consolidated Digital Asset Basic Act, while opposition lawmakers seek to repeal the planned crypto tax set for implementation next yea
South Korea's Financial Services Commission (FSC) is preparing to introduce a comprehensive digital asset bill that will address stablecoin issuance and regulations. The proposed legislation aims to streamline existing fragmented bills in parliament by consolidating rules on exchanges, disclosures, and system resilience standards for the cryptocurrency market.
The FSC has reportedly informed lawmakers of its intention to draft this government-backed proposal after months of delays. However, key issues remain unresolved, such as whether won-denominated stablecoin issuers should be majority bank-owned and if ownership limits will apply to major crypto exchanges.
Simultaneously, opposition politicians are advocating for the repeal of a 22% crypto tax that is set to take effect in January 2027. An amendment to the Income Tax Act has been introduced by lawmaker Song Eon-seok, which aims to remove taxes on income from transferring or lending digital assets. The bill will be reviewed by relevant subcommittees after being tabled.
The current tax law mandates a 20% federal tax plus a 2% local income tax for crypto incomes exceeding 2.5 million won ($1,700) annually starting in January 2027. Proponents of the repeal argue that taxing cryptocurrency is unfair compared to other investment vehicles.
These developments highlight South Korea's ongoing efforts to regulate its burgeoning digital asset market while addressing concerns from various stakeholders. The outcome could significantly impact crypto trading and investment strategies for traders based in or with exposure to the region, potentially influencing global regulatory trends.
Traders should closely monitor the progress of both legislative initiatives as they may have immediate implications on tax obligations and operational compliance requirements.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.