South Korea’s FSC Drafts Stablecoin and Exchange Rules as Opposition Moves to Kill 22% Crypto Tax Before 2027

South Korea’s financial regulator is hammering together a sweeping digital asset bill — stablecoins, exchanges, the works — even as the country’s main opposition party races to kill a 22% crypto income tax before it ever draws a single won. Two tracks. Opposite directions. The parallel pushes have turned Seoul into a two-front crypto policy battleground inside one of the world’s most ferocious retail trading markets.

The Financial Services Commission’s planned legislation would drag stablecoins and exchanges under a single government-backed framework, according to Cointelegraph. The bill’s scope signals a real ambition to put the piecemeal approach behind them — exchanges currently operate under anti-money laundering rules, but stablecoin issuance floats in a legal void, untethered to anything. This push follows the country’s broader crypto regulatory law getting shunted into 2026, stalled by a political brawl over who should be permitted to issue stablecoins: banks, fintech firms, or some narrower licensed club, per Yahoo Finance.

The ruling party has already been laying pipe. On June 10, 2025, lawmakers dropped the Digital Asset Basic Act in the National Assembly — a stablecoin-focused proposal that would classify the tokens as a “means of payment” under the Foreign Exchange Transactions Act. That classification is not cosmetic. It hands regulators explicit authority over stablecoin issuers rather than leaving the instruments stranded somewhere between commodity and currency, in a gray zone nobody wants to own. The proposal also bakes in bankruptcy protection for stablecoin holders, a provision aimed squarely at the contagion risk that the 2022 Terra collapse exposed — a disaster that originated in South Korea and vaporized roughly $60 billion in value.

While the FSC constructs its framework, the opposition is swinging hard the other way on tax. Lawmakers have proposed abolishing the 22% crypto income tax outright, according to The Block. The levy targets annual virtual asset gains exceeding 2.5 million won — roughly $1,800 — and it has been punted repeatedly; originally set for 2025, pushed to 2027, and now the opposition wants it gone before a single deadline actually lands.

The political math here is not hard. South Korean retail investors have gone into crypto with an intensity matched almost nowhere, and XXRP$1.09▲3.00% in particular has logged outsized trading volume on domestic exchanges. A gains tax — even one with a reasonably high exemption — is politically radioactive with a constituency large enough to tip close elections. The opposition’s repeal push is not subtle policy refinement. It’s a direct play to a voter bloc that has already watched one tax deadline slip past without consequence, and knows it.

All of which makes for genuine uncertainty on the ground. Exchanges and stablecoin issuers are staring at a regulatory framework that could reshape their operating costs and compliance loads overnight; investors, meanwhile, face a tax regime that may or may not exist in 18 months. CryptoRank reported in May 2026 that the 2027 implementation date remains politically contested, the opposition’s repeal bid adding a fresh coat of doubt over the whole thing.

There is a third front, too. South Korea plans to revise its 1950 National Property Act to classify virtual currencies and intellectual property as national assets, per CoinDesk. The revision to the 76-year-old statute would give the government a legal basis to claim seized or unclaimed crypto holdings as state property — a move extending official authority over digital assets into territory few jurisdictions have entered. Whether that classification bumps against the FSC’s “means of payment” framing for stablecoins is a question lawmakers have not publicly touched.

The global backdrop lends the whole thing extra weight. Total crypto market cap sits at $2,281.38 billion as of July 29, 2026, with a Fear & Greed Index reading of 29 — firmly in fear territory. UUSDT$0.9992▲0.00% (USDT) holds a $183.9 billion market cap; UUSDC$0.9998▲0.00% sits at $72.21 billion — figures that make plain the systemic scale of what Seoul is now trying to regulate. BBTC$64,364.00▲1.40% trades at $64,360, up 1.6% in 24 hours. XRP — the token South Korean retail can’t quit — sits at $1.09 with a $67.93 billion cap.

The FSC’s bill and the opposition’s tax repeal are on a collision course in the National Assembly, where the ruling party’s stablecoin framework and the opposition’s abolition push will fight for floor time and votes. The next concrete signal comes down to one question: whether the Digital Asset Basic Act clears committee before year-end, or whether the stablecoin issuer dispute that derailed the broader law in 2025 crawls back out to stall the FSC’s consolidated bill all over again.