Cryptocurrency Tax Abolition?...Ruling and Opposition Parties Clash Over Stablecoin Regulation and Taxation

▲ KRW (Korean Won), Bitcoin (BTC), Stablecoin, Virtual Assets/AI Generated Image

The government and the ruling party are preparing a unified stablecoin regulation proposal, while the opposition party is pushing for the abolition of cryptocurrency taxation in 2027.

According to FXStreet, a cryptocurrency specialized media outlet, on July 29 (local time), the Financial Services Commission (FSC) plans to establish a unified Digital Asset Framework Act with the Democratic Party of Korea. The bill will include provisions for stablecoin issuance and distribution, regulations for digital asset businesses, and entry requirements for exchanges. Disclosure, internal control, and IT system resilience standards will also be included.

Currently, 10 bills related to digital assets and stablecoins are pending in the National Assembly. The FSC's unified proposal will serve as a negotiation plan for the government and ruling party to consolidate fragmented bill discussions. However, the timing and method of submitting the bill have not yet been finalized.

A key issue is the bank equity requirement for Korean Won (KRW) stablecoin issuers. Opinions are divided on whether banks should hold a majority stake in the issuers. No conclusion has been reached on whether to apply ownership equity restrictions to large cryptocurrency exchanges.

The opposition party is pushing for an amendment to the Income Tax Act that would abolish cryptocurrency taxation altogether. The amendment, proposed by Rep. Song Eon-seok of the People Power Party on March 19, seeks to delete the provisions for taxing income from the transfer or lending of digital assets. A petition for tax abolition, agreed upon by over 50,000 people, is also awaiting review by the National Assembly, but a specific review schedule has not yet been set.

Under the current plan, starting from January 1, 2027, a 20% tax and a 2% local income tax will be imposed on income from cryptocurrency transfers or lending exceeding 2.5 million won annually. The government and the Democratic Party of Korea support the implementation of this taxation. The People Power Party argues that it is unfair to impose taxes only on cryptocurrencies when most general stock investors are exempt from taxation. On May 7, the Ministry of Economy and Finance announced its policy to proceed with cryptocurrency taxation as scheduled, after multiple postponements.

[Article Summary]

-The Financial Services Commission and the Democratic Party of Korea are pushing for a unified Digital Asset Framework Act, including stablecoin regulation.

-Key issues include the bank equity requirements for KRW stablecoin issuers and ownership restrictions for large exchanges.

-The People Power Party is advocating for the abolition of taxation on income from cryptocurrency transfers and lending, scheduled to take effect in 2027.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*