South Korea Targets ‘Problematic’ Crypto Tax as Stablecoin Skeptic Gains Influence
TL;DR:
The People Power Party (PPP) proposes eliminating the 22% tax on crypto assets, originally scheduled for January 2027, citing a lack of fairness compared to the stock market.
Shin Hyun-song, former head of research at the BIS and a critic of stablecoins, has been nominated as the new governor of the Bank of Korea to stabilize the won against the dollar.
A high-level private meeting will take place on March 25 at the Coinone headquarters with major exchanges (Upbit, Bithumb) to debate tax reform.
The regulatory landscape in Seoul faces a critical crossroads. The ruling party is exerting pressure for a tax exemption for digital investors, but South Korea is putting the “problematic” crypto tax on its radar, arguing for financial justice, while the central bank prepares for a more rigid stance.
Legislative urgency stems from the disparity with traditional assets: the government plans to abolish the financial investment income tax, making the current 22% levy on gains exceeding 2.5 million won ($1,800) seem anachronistic. On the macro front, the won/dollar exchange rate is hovering around 1,500 won—crisis levels that justify the arrival of a “hawkish” profile at the monetary authority.
The Rise of a Skeptic: Shin Hyun-song and the Future of Stablecoins
The nomination of Shin Hyun-song as Governor of the Bank of Korea adds friction to the industry. The candidate, with an academic background at Princeton and a distinguished career at the Bank for International Settlements (BIS), is a critic of won-linked stablecoins, labeling them a risk to monetary sovereignty and a vehicle for evading exchange regulations.
In contrast to the openness sought by the PPP through tax relief, Shin’s vision suggests the central bank may prioritize the development of a Central Bank Digital Currency (CBDC) over private options. His concern lies in the fact that the ease of exchanging local stablecoins for dollarized assets could drain South Korea’s foreign exchange reserves during times of geopolitical instability.
In summary, the Korean crypto industry is caught between two paths: a legislative power seeking to incentivize the market by eliminating taxes and a monetary regulator that views digital assets as a potential threat to the stability of the won.
Filed under: News - @ March 24, 2026 3:23 am