South Korea’s Crypto Bill Nears the Finish Line as the Tax Debate Heats Up

The Digital Asset Basic Act would give crypto exchanges and token issuers clearer legal guidance, addressing licensing requirements, stablecoin issuance rules, and digital asset definitions. Lee Eog-weon told a parliamentary hearing on Thursday that talks are nearing completion and the government will push to introduce the bill as soon as possible.

For investors, a clear framework could reduce legal uncertainty around trading and holding digital assets and make it easier for firms to plan new products. However, the proposal does not yet detail capital requirements or reserve rules for stablecoin issuers, which could still change before the bill reaches the National Assembly.

Tax Debate Intensifies

The crypto tax is set to take effect on January 1, 2027, but authorities have already postponed it three times over fairness and infrastructure concerns. Public pressure keeps building, with a May petition seeking repeal reaching 53,809 signatures and an August petition for a two-year deferral crossing the same threshold in mid-September.

Kim Min-seok, leader of the ruling Democratic Party, said he is reviewing various inputs on the tax plan and called for a thorough final review, suggesting the party has not settled on a final position. The debate highlights a timing problem, as some lawmakers worry the tax could start before the framework sets basic rules.

Next Steps and Deadlines

The National Tax Service plans to finalize its draft tax notice by October 30, followed by a preliminary review and public notice in November. That schedule leaves little time if lawmakers decide to postpone the tax again, which remains a possibility given the ongoing public and political pressure.