South Korea's Financial Services Commission (FSC) announced on July 29 that it plans to draft a consolidated Digital Asset Basic Act that would for the first time establish comprehensive stablecoin regulations in the country, according to Cointelegraph. The announcement came during a National Assembly policy briefing ahead of a key legislative window, and signals a major regulatory reshape for one of Asia's largest cryptocurrency markets. In parallel, opposition lawmakers are pushing to repeal a 22% crypto capital gains tax scheduled to take effect in January 2027, creating a dual-track legislative process that could fundamentally alter South Korea's digital asset landscape.
What the Digital Asset Basic Act Would Cover
The proposed legislation would consolidate South Korea's currently fragmented crypto regulations into a single framework. The FSC told the National Assembly that the new act would address stablecoin issuance, reserve requirements, and oversight of tokenized assets — areas that have operated in a regulatory gray zone under existing rules. The move follows growing pressure from domestic exchanges and international regulators for clearer stablecoin rules, particularly after the Terra/Luna collapse in 2022 exposed systemic risks in algorithmic stablecoins. South Korea has been one of the most active crypto trading markets globally, with retail participation among the highest per capita in the world. The FSC's plan represents the most significant regulatory initiative since the country implemented its initial crypto reporting framework.
You Might like this also : South Korean Police Raid Former Incheon Mayor's Home Over Alleged Undisclosed Crypto Holdings
The Opposition's Push to Repeal the Crypto Tax
While the FSC lays the groundwork for stablecoin rules, opposition lawmakers are simultaneously pushing legislation to repeal the 22% capital gains tax on crypto profits, which is currently scheduled to take effect in January 2027. The tax has been delayed multiple times since it was first proposed, and the opposition argues that imposing it would drive Korean traders to unregulated offshore exchanges and stifle innovation in the domestic digital asset sector. A tax repeal bill has cleared a parliamentary committee, according to KuCoin News, advancing it to the next legislative stage. The parallel tracks — new stablecoin rules on one hand, tax repeal on the other — reflect a broader debate within South Korea about whether to regulate or encourage the crypto industry.
Why This Matters for the Global Crypto Market
South Korea consistently ranks among the top five global crypto trading markets by volume, and regulatory changes there have outsized impact on global liquidity and price discovery. The country's so-called "Kimchi premium" — where crypto prices on Korean exchanges trade at a premium to global venues — has historically been a barometer of retail demand. Clearer stablecoin rules could attract institutional participants who have been waiting on the sidelines, while the tax repeal would remove a significant headwind for retail traders. The developments also come as South Korea's crypto exchange landscape consolidates, with Mirae Asset recently taking 97% control of Korbit (rebranded as Digital X), marking the first time a traditional financial group has owned a Korean crypto exchange. The combination of regulatory clarity and institutional entry could reshape the competitive dynamics of the Korean market.
What to Watch Next
The National Assembly is expected to debate the Digital Asset Basic Act in the coming weeks, with the FSC aiming to submit a draft bill before the end of the current legislative session. The crypto tax repeal bill's advancement to the full parliament will be the next key milestone. Market participants should watch for whether the stablecoin rules align with international frameworks — particularly the EU's MiCA regulation and U.S. stablecoin proposals — as South Korea's approach could influence other Asian jurisdictions. Samsung's earnings on Thursday and the broader market recovery from the KOSPI crash will also shape the domestic context for crypto regulation.
