South Korea Targets Early January 2027 for Digital Asset Basic Act

South Korea aims to finalize its Digital Asset Basic Act by early January 2027, a timeline that would align the country's core crypto framework with the United States' stablecoin rules, which are expected to take effect on January 18, 2027, according to Democratic Party lawmaker Min Byeong-deok.

Min, who is steering the legislation through the National Assembly, set out two positions with direct consequences for issuers and investors. First, he opposes a bank ownership threshold as a licensing condition for Korean won stablecoin issuers. Second, he wants digital-asset taxation pushed back to 2029, paired with a three-year loss carryforward mechanism.

Focused negotiations on the Act's core provisions could begin as soon as next week, Min said, and he has called on industry participants and experts to contribute actively over the next two months.

What does the ownership debate change for issuers?

The contested requirement would force any entity issuing a won-denominated stablecoin to have a bank hold at least 50% of its shares plus one share — effective control by a licensed deposit-taking institution. Min rejects that structural test. He argues the statute should instead regulate issuer conduct and safety directly.

His proposed conditions include:

• 100% reserve backing for all issued stablecoins
• Immediate redemption on demand
• Anti-money laundering safeguards
• Know-your-customer verification requirements

A bank-led consortium model for won stablecoin issuance has also been discussed as one possible structure, though it would not be the only route to a license under Min's framework.

The distinction matters. A conduct-based regime would let non-bank fintechs, exchanges and payments companies apply for issuance rights provided they meet reserve, redemption and compliance standards. An ownership-based regime would concentrate issuance among commercial banks by design. Which test survives the negotiating process will determine the competitive perimeter of Korea's stablecoin market before it launches.

The reserve and redemption standards Min proposes mirror the approaches taken in the U.S. GENIUS Act framework and the EU's MiCA, which took effect in 2024 — a signal that Korean issuers would face comparable capital and custody obligations to Western counterparts.

What does the tax delay change for investors?

Under Min's proposal, taxation of digital-asset gains would not begin until 2029. Korea has already deferred its crypto tax regime multiple times; a legislated delay to 2029 would give retail and institutional holders roughly three additional years of untaxed trading.

The three-year loss carryforward provision is the more structurally significant element. It would let investors offset realized gains with losses incurred in prior years — a mechanism familiar from conventional securities taxation but absent from earlier Korean crypto tax drafts, which taxed gains annually with no offset across periods. For active traders, that converts a per-year levy into something closer to a smoothed multi-year tax on net performance.

The clock now running

The two-month consultation window Min described places the substantive drafting debates in the near term, not the end of the parliamentary session. Stakeholders who want to shape the issuance standards — particularly the exact redemption and reserve requirements — face a narrow interval to submit positions before the bill text consolidates.

If the Act passes on the early-January 2027 schedule, Korea would enter the same compliance window as U.S. stablecoin issuers facing the January 18, 2027 effective date, giving won-backed token projects a synchronized regulatory starting line with dollar-backed competitors.