South Korea is nearing the introduction of a Digital Asset Basic Act that would create the country’s first broad legal framework for cryptocurrency businesses and stablecoin issuance, while lawmakers simultaneously question whether a planned crypto tax should begin before those rules are in force.
Financial Services Commission Chairman Lee Eog-weon told a parliamentary hearing that government consultations on the bill had entered their final stage. Once those discussions conclude, the government intends to move forward with legislation “as soon as possible,” according to comments reported by Yonhap News Agency.
The proposed act would establish licensing requirements for cryptocurrency exchanges and other digital-asset businesses, introduce rules for stablecoin issuance, and refine legal definitions covering crypto-related activities and products. Its progress places Seoul’s regulatory agenda on a collision course with a separate tax regime scheduled to begin on Jan. 1, 2027.
Tax timetable faces renewed scrutiny
Members of parliament raised concerns during the hearing that cryptocurrency taxation could take effect before the Digital Asset Basic Act provides the legal and supervisory structure intended to govern the market. Lee responded that the design of the tax framework should take “various circumstances into full consideration,” Yonhap reported.
That response leaves room for further debate over the 2027 start date, though it does not amount to a commitment to delay the tax. South Korea has already postponed the program three times as lawmakers, industry participants, and tax authorities debated how to apply the rules fairly and whether the necessary reporting systems are ready.
The current plan would tax gains from virtual assets under a separate regime from securities taxation. Its repeated delays have reflected concerns about the treatment of smaller traders, the ability of platforms to calculate taxable gains accurately, and the risk that rules could be applied unevenly across domestic and overseas activity.
Political pressure for another postponement has increased in recent months. A petition calling for the repeal of the planned crypto tax reached 50,000 signatures in May, meeting the threshold for a legislative review under South Korea’s national petition system. A second petition, submitted in August and seeking a two-year deferral, also reached 50,000 signatures by mid-September.
Kim Min-seok, leader of the ruling Democratic Party of Korea, said Thursday that he was reviewing submissions related to the tax proposal. His remarks followed growing calls to move the implementation date beyond 2027, potentially giving lawmakers more time to align tax rules with the Digital Asset Basic Act.
Tax agency continues work toward 2027 launch
The National Tax Service is nevertheless proceeding with administrative preparations under the existing timetable. It plans to finalize a draft tax notice covering digital assets by Oct. 30, followed by a preliminary review and public notice process in November.
Those steps indicate that tax officials are preparing for enforcement even as the political timetable remains unsettled. A public notice would give market participants and tax professionals a clearer view of how the agency intends to interpret reporting duties, taxable transactions, and calculation procedures.
Administrative guidance could also expose practical problems that lawmakers may need to address before the tax takes effect. Cryptocurrency activity often spans local exchanges, foreign platforms, self-custody wallets, and blockchain-based transfers that do not fit neatly into conventional tax-reporting models. Establishing a taxable gain requires authorities and traders to determine acquisition prices, disposal prices, and the identity of the relevant taxpayer across those movements.
The issue becomes harder when assets are transferred between platforms rather than sold, or when records from overseas services differ from those maintained by South Korean businesses. The tax authority’s draft notice may clarify how it intends to handle such cases, but legislation would likely still be needed for major changes to the implementation schedule or tax structure.
Stablecoin rules move into focus
The Digital Asset Basic Act reaches beyond exchange supervision. Stablecoin issuance is expected to form a central part of the proposed framework, bringing tokens designed to maintain a fixed value within a formal regulatory perimeter.
Stablecoin policy has become a sensitive subject for regulators globally because issuers may hold large pools of reserve assets while their tokens circulate quickly through trading venues, payment services, and decentralized applications. South Korean legislation could set requirements for issuers operating domestically, including standards tied to authorization and oversight, although detailed obligations were not outlined in Lee’s parliamentary comments.
The legislation would also sharpen legal definitions for digital-asset products and activities. That work could reduce ambiguity for businesses seeking to determine whether their services fall within financial regulation, while giving the Financial Services Commission a clearer basis for supervision.
South Korea already regulates virtual-asset service providers under anti-money-laundering rules and has introduced measures aimed at protecting users of cryptocurrency services. The pending act would extend that approach into a more comprehensive framework covering market structure and issuance, rather than focusing mainly on service-provider registration and customer protections.
The government’s immediate challenge is sequencing. Introducing the Digital Asset Basic Act soon could give parliament a vehicle to settle long-running questions around stablecoins, exchange oversight, and legal definitions. Yet the tax deadline remains fixed unless lawmakers amend it, and the National Tax Service’s November public-notice process will bring the operational details of the 2027 plan into sharper view.
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