South Korea's Financial Services Commission is preparing a government-backed digital asset bill that would set rules for stablecoins and exchanges. At the same time, opposition lawmakers are pushing to repeal a 22% crypto tax that's scheduled to take effect in 2027. The two moves highlight the country's ongoing tug-of-war between tighter oversight and industry-friendly policies.
The FSC's bill
The FSC's planned legislation would cover stablecoins and exchanges — two areas that have drawn scrutiny globally. South Korea already has a basic crypto framework from 2021, but it doesn't directly address stablecoin reserves or exchange licensing in the way this bill is expected to. The commission hasn't released a draft yet, but the fact that it's calling the bill "government-backed" signals it has high-level support.
Stablecoins are a particular focus. Regulators in several countries are worried about reserves, transparency, and the risk of runs. South Korea's move puts it in line with places like Japan and the EU, which have already passed stablecoin rules. Exchanges, meanwhile, would face clearer standards on custody, listing, and user protection.
The tax repeal push
Opposition lawmakers are trying to scrap the 22% crypto tax before it ever takes effect. The tax was originally set to start in 2022, then delayed to 2025, and then pushed again to 2027. Now some politicians want to kill it entirely. They argue the tax would drive trading offshore and hurt the local industry.
The timing isn't great for the tax. South Korea's crypto market has grown steadily, but retail investors are still smarting from the 2022 Terra collapse. A new tax on gains above a certain threshold could push more activity to unregulated platforms. The opposition's repeal bill is a direct challenge to the current government's fiscal plans.
These two developments pull in opposite directions. The FSC's bill would bring more regulation, which some exchanges welcome as a way to legitimize the industry. But the tax repeal effort shows there's still political appetite for a lighter touch. The outcome will depend on which side gains momentum in the National Assembly.
For now, exchanges are watching closely. A clear regulatory framework could attract institutional players, while a tax repeal would keep retail traders happy. Neither is guaranteed. The FSC's bill could take months to draft and pass, and the tax repeal faces opposition from the finance ministry, which counts on the revenue.
Next steps
The FSC hasn't set a date for introducing the bill. Lawmakers are expected to debate both proposals in the coming months. The tax repeal is likely to intensify as 2027 approaches — if it's not repealed by then, the 22% levy will kick in automatically. That deadline gives the opposition a concrete target, and the FSC a reason to move fast on its own bill.
