Bill Reaches Final Review Stage

The Financial Services Commission has confirmed that discussions on the proposed Digital Asset Basic Act have reached their final phase. Chairman Lee Eog-weon told a parliamentary committee hearing that officials would proceed without unnecessary delays. A government draft could appear as early as the end of October, after which it would move into legislative channels following talks with the ruling party.

Unresolved elements include ownership limits on major shareholders in cryptocurrency exchanges, set between 15 and 20 percent, and the initial rollout of won-denominated stablecoins. Issuance would start with consortia where banks hold a majority stake. The framework also addresses trading platform supervision and conditions for stablecoin creation.

Taxation Remains Scheduled for 2027

Lawmakers raised concerns that investors could face taxation before legal definitions and policy guidelines for digital assets are fully established. One People Power Party representative argued that the tax should be suspended or repealed until the basic law is adopted. The chairman responded that the Ministry of Finance and Economy is gathering industry opinions and will weigh all circumstances.

South Korea’s planned levy applies a combined 22 percent tax — 20 percent national income tax plus 2 percent local income tax — to qualifying annual gains from cryptocurrency transfers and lending, after a 2.5 million won deduction. The framework was enacted through 2020 amendments to the Income Tax Act but has already been postponed three times, with the current target date set for January 1, 2027.

National Tax Service Prepares Administrative Draft

Despite the political debate, the National Tax Service continues its work on the tax rules. The agency plans to finalize its draft notice by October 30, followed by preliminary review on November 6, public announcement on November 30, and implementation on January 1, 2027. This schedule includes guidance on staking rewards, airdrops, hard forks, and decentralized finance activities.

Authorities are consulting major exchanges, including Upbit, Bithumb, Coinone, DigitalX, and Gopax, on reporting systems and transaction classifications. The National Tax Service notes challenges in obtaining complete data from overseas platforms and privately controlled wallets. A separate parliamentary petition seeking a two-year postponement has reached the required signatures but has not yet altered the timeline.

Industry Input Shapes Outlook

On October 20, government officials met with leaders of the country’s five largest exchanges to discuss preparation challenges and possible adjustments. Deputy Prime Minister and Finance Minister Lee Hyung-il stated that views from all parties would be considered before any decision on the tax start date. Ruling party leader Kim Min-seok has called for a year-end review to determine whether to proceed on schedule or strengthen the system first.

One opposition proposal would shift the tax start to January 1, 2029, aligning with full Organization for Economic Co-operation and Development Crypto-Asset Reporting Framework exchanges. Four bills currently before the National Assembly seek to repeal or postpone the levy. The separate delay measure remains under committee review and does not automatically suspend the planned 2027 implementation.

Stablecoins and Platform Rules Advance

Policy discussions also cover ownership caps for exchanges and pathways for won stablecoins. Bank-led groups are expected to receive priority in the initial issuance phase, while privately issued tokens continue to face scrutiny from the Bank of Korea. The broader framework builds on existing investor protection measures but aims to provide a comprehensive system for business licensing and digital asset handling.

As consultations conclude, the coming weeks will determine whether the tax timeline holds or whether additional legislative steps alter the path forward for both the regulatory framework and its associated fiscal provisions.