South Korea crypto law near final as tax delay gains weight

South Korea's long-awaited crypto framework, the Digital Asset Basic Act, is in the final stage of government consultations, the chairman of the Financial Services Commission (FSC) told a parliamentary audit on Thursday, The Block reported, citing local outlet Bloomingbit. At the same hearings, officials softened their line on a crypto tax that is due to start in just over two months.

What the Digital Asset Basic Act would do

The bill is meant to be Korea's first comprehensive rulebook for the sector. According to the reports, it would:

• set legal definitions of digital assets;
• create a licensing regime for exchanges and other service providers;
• add rules for issuing stablecoins, including won-denominated ones.

The FSC chairman said the government will try to introduce the bill "as quickly as possible" once consultations wrap up. No submission date was given. Korea is moving on the same questions the EU settled with MiCA, and local banks are already testing won and yen tokens, such as the Shinhan–SBI yen stablecoin pilot.

The tax question

Under a 2020 amendment to the Income Tax Act, gains from transferring or lending crypto above 2.5 million won a year are to be taxed at 20%, or 22% including local tax. It was meant to start in 2022 and has been postponed three times; the current start date is Jan. 1, 2027.

• Opposition lawmaker Song Eon-seok argued it is wrong to tax crypto before the Basic Act even defines it, Money Today reported. The FSC chairman replied that "various circumstances" must be fully considered.
• Deputy Prime Minister and finance minister Lee Hyung-il said the government will gather industry and parliamentary views and decide "after careful deliberation", Yonhap reported.
• Ruling Democratic Party leader Kim Min-seok said he had raised the need for a thorough final review, a softer tone than the government's earlier insistence on 2027.

Not everyone wants a delay: Democratic Party lawmaker Yoon Hu-duk said repeated postponements undermine policy consistency, while the opposition People Power Party, which backs a deferral, says the tax infrastructure is still not ready. As we reported, exchanges asked for detailed rules and time to build systems earlier this week.

What to watch

The National Tax Service still plans to finalise its draft crypto tax notice by Oct. 30, with a preliminary review and public notice in November, according to local outlet Digital Asset. Two public petitions, one to repeal the tax and one to defer it for two years, have each passed the 50,000 signatures needed to trigger a parliamentary review. Any delay would require lawmakers to amend the law before January.