South Korea Plans Consolidated Digital Asset Bill as Tax Repeal Push Grows

South Korea’s financial regulator is preparing unified legislation for the cryptocurrency sector as the government’s opposition launches a separate effort to abolish a tax scheduled for 2027.

The Financial Services Commission (FSC) plans to develop the Digital Asset Basic Act in consultation with the Democratic Party, which has been in government since June 2025. According to the South Korean financial news outlet Edaily, the legislation would regulate stablecoin issuance and circulation, define digital asset businesses, and establish operating rules for the sector.

The FSC has also pledged to strengthen AML controls addressing the use of stablecoins and other digital assets in financial crime.

This follows President Lee Jae-myung’s campaign promises to permit spot crypto ETFs and support a won-backed stablecoin market. South Korea has a large digital asset market. By the end of 2025, South Korean exchanges reported more than 11 million accounts eligible to trade, with the country’s population approximately totalling 51.5 million people.

Ten digital asset bills are pending before the National Assembly, but disagreements have slowed progress. Unresolved questions include whether won-denominated stablecoin issuers should be controlled by bank-led consortiums and whether ownership limits should apply to major exchanges.

Separately, lawmakers have been scheduled to consider an opposition-backed amendment seeking to repeal South Korea’s planned digital asset income tax. Introduced by People Power Party politician Song Eon-seok, the bill would remove taxes on income from transferring or lending digital assets.

Unless the law changes, annual crypto income above 2.5 million won (approx. $1,720) will face a 20% national tax and 2% local income tax from January 1, 2027. Cointelegraph reports that a petition to repeal the act has received more than 50,000 signatures.