Key Insights
- South Korea’s People Power Party proposes delaying cryptocurrency gains taxation from 2025 to 2028.
- The bill cites concerns over negative investor sentiment and potential market exodus if taxes are imposed on high-risk crypto assets.
- South Korea remains a major crypto market, with 12.5% of the population using crypto and the Korean won becoming the most-used fiat currency for crypto trading in Q1 2024.
SEOUL (MarketsXplora) – South Korea’s right-wing People Power Party has proposed postponing the taxation of cryptocurrency gains by three years, potentially pushing the implementation date from 2025 to 2028, according to a bill submitted to the National Assembly last Friday.
The proposal cites concerns over negative investor sentiment in the crypto market.
“Most investors are expected to leave the market if the country imposes an income tax on an asset that has higher risks than stocks,” the bill’s description stated on the National Assembly’s website.
This marks the latest development in South Korea’s ongoing debate over crypto taxation. A 20% tax on crypto gains was initially set to take effect on January 1, 2022, but has already been delayed twice due to strong opposition from investors and industry experts.
The People Power Party, which includes current President Yoon Suk-yeol, had pledged during the last general election to delay the crypto tax implementation.
South Korea’s Ministry of Economy and Finance has not yet decided on additional delays, according to local news reports. The ministry is expected to announce new amendments to the tax code at the end of this month.
The proposed delay comes as South Korea maintains its position as one of the world’s largest and most active cryptocurrency markets. The Financial Services Commission reported that approximately 6.5 million South Korean citizens, representing 12.5% of the country’s population, used crypto by the end of last year.
Furthermore, data from Kaiko showed that the Korean won surpassed the U.S. dollar as the most-used fiat currency for crypto trading in the first quarter of 2024, underscoring the market’s significance.