South Korea's crypto bill enters final talks ahead of 2027 tax deadline

South Korea has moved closer to introducing its Digital Asset Basic Act, with financial regulators entering the final stages of consultations while lawmakers question whether cryptocurrency taxation should begin before the regulatory framework is completed.

Summary

• South Korea’s financial regulator says government consultations on the Digital Asset Basic Act are nearing completion.
• FSC Chairman Lee Eog-weon has pledged to advance the legislation quickly without announcing a formal introduction date.
• Lawmakers want cryptocurrency taxation postponed or repealed until the country establishes a clearer regulatory framework.
• The proposed 22% tax on qualifying crypto gains remains scheduled for January 1, 2027, following three postponements.
• The National Tax Service is preparing further tax guidance, while the government continues reviewing industry concerns.

According to Yonhap News Agency’s October 22 report, Financial Services Commission (FSC) Chairman Lee Eog-weon told the National Assembly’s Political Affairs Committee that discussions on the legislation were nearly complete and that authorities would move to advance the bill without unnecessary delays.

South Korea’s digital asset law enters final consultations

Lee made the remarks during a parliamentary audit after opposition lawmakers questioned the government’s progress on its promised cryptocurrency legislation.

People Power Party lawmaker Song Eon-seok noted that officials had committed to preparing a government proposal during a presidential briefing in July, but had yet to publicly release a completed draft.

The legislation, commonly called the Digital Asset Basic Act or Digital Asset Framework Act, is expected to establish rules for cryptocurrency businesses, exchange licensing and stablecoin issuance.

Its provisions remain under negotiation, particularly those concerning the supervision of trading platforms and the conditions under which companies could issue won-denominated stablecoins.

In September, crypto.news reported plans for November parliamentary review of the second-stage digital asset legislation. The FSC had identified the National Assembly’s bill review subcommittee as the next venue for legislative consideration.

October’s hearing did not establish a revised submission date or confirm that lawmakers had reached agreement on the unresolved provisions.

The framework would build on South Korea’s existing cryptocurrency investor protection legislation, which regulates certain exchange practices but does not provide the proposed comprehensive system for digital asset issuance and business licensing.

Lawmakers demand crypto tax suspension until rules are ready

The parliamentary discussion focused heavily on the possibility that investors could begin paying cryptocurrency income tax before lawmakers complete the industry’s regulatory framework.

Song argued that the government should first establish the legal classification of digital assets and the rules governing their treatment.

He called for the planned tax to be abolished or suspended until lawmakers had prepared the necessary legislation.

Lee did not endorse either option. Responding to questions about the implementation timetable, he said the Ministry of Finance and Economy was collecting opinions from interested parties and that authorities should consider the circumstances surrounding taxation.

South Korea currently plans to impose a combined 22% tax on qualifying annual cryptocurrency gains above 2.5 million won.

The levy consists of a 20% national income tax and a 2% local income tax. Parliament introduced the framework through amendments to the Income Tax Act in 2020, but implementation has already been delayed three times.

The current starting date is January 1, 2027. Any further postponement would require legislative action, and no decision to change that date emerged from Thursday’s hearing.

Crypto exchanges face unresolved tax reporting requirements

Preparations have continued despite political pressure to delay implementation.

The National Tax Service has been developing guidance covering transactions such as staking rewards, airdrops, hard forks and decentralized finance activity.

During an October 13 parliamentary hearing, tax officials said they were consulting exchanges over reporting systems and the treatment of different cryptocurrency transactions.

An October 19 report detailed planned consultations with exchanges, including Upbit, Bithumb, Coinone, DigitalX and Gopax, as authorities sought feedback on implementation difficulties.

A separate September petition seeking a two-year postponement reached the 50,000 signatures required to trigger parliamentary consideration.

The petition’s legislative review does not automatically suspend the tax. Opposition proposals and demands from some ruling-party lawmakers likewise remain subject to parliamentary approval.

Tax officials must still clarify how investors will calculate taxable proceeds across different transaction types and report transactions involving overseas platforms or privately controlled wallets.

National Tax Service prepares November tax notice

The National Tax Service is proceeding with administrative preparations under the existing January timetable.

According to an October 22 report by Digital Asset, the agency plans to finalize its draft cryptocurrency tax notice on October 30.

The reported schedule calls for preliminary review on November 6, followed by public notice on November 30 and implementation on January 1, 2027.

Separately, the proposed regulatory framework faces unresolved decisions over stablecoin issuance. Policymakers have discussed whether bank-led groups should receive priority when issuing won-backed tokens and whether cryptocurrency exchanges should face ownership limits.

The Bank of Korea has expressed concerns about privately issued stablecoins while continuing its own work on tokenized deposits and institutional digital currency infrastructure.

Neither the financial regulator’s latest comments nor the tax authority’s administrative schedule establishes when Parliament will receive a finalized Digital Asset Basic Act or vote on another cryptocurrency tax postponement.