South Korea's People Power Party is seeking to completely scrap the proposed 22% virtual asset tax

The People Power Party in South Korea is attempting to eliminate the proposed taxes on digital assets to ensure fairness for investors. 

While the party is pushing for fairness, the Bank of Korea recently nominated a known stablecoin skeptic with a preference for tight monetary policies as its governor. 

Why does the People Power Party want to scrap the crypto tax entirely?

The People Power Party has taken a firm stance against the virtual asset taxation system that was originally scheduled to be implemented in January 2027. Party leadership is set to hold a high-profile private meeting at the Coin One headquarters in Seoul’s Park One Tower on March 25. 

The meeting will include top-tier officials such as Floor Leader Song Eon-seok and Policy Committee President Yoo Sang-beom meeting with representatives from Upbit, Bithumb, Coin One, Korbit, and Gopax, as well as the Digital Asset Exchange Joint Council (DAXA).

The meeting will be to debate the “Partial Revised Act of the Income Tax Act,” which was proposed by Floor Leader Song on March 19. Under current laws, crypto gains exceeding 2.5 million won (roughly $1,800) were supposed to be taxed at a 22% rate. 

However, Song argues that since the government already plans to abolish the financial investment income tax to protect the capital market, keeping a separate tax on virtual assets is “problematic in terms of equity.”

The PPP’s goal is to delete these taxation regulations entirely and ensure that crypto investors are not unfairly targeted compared to traditional stock market investors. 

During the upcoming 45-minute private session, the party plans to discuss international trends, the reality of the domestic market, and how to handle overseas transaction issues. 

The Bank of Korea nominates new governor

Shin Hyun-song has officially been nominated as the new Governor of the Bank of Korea. Shin previously served as the Head of Research at the Bank for International Settlements (BIS) and as a professor at Princeton University. Due to his nomination, Shin stepped back from his BIS duties immediately, and Frank Smets took over his role there in the meantime.

The ongoing crisis in the Middle East has raised concerns of stagflation. The won/dollar exchange rate is currently hovering around 1,500 won, the highest level since the previous foreign exchange crisis, and Shin’s primary task will be stabilizing the currency. 

He is widely considered to be a “hawk,” a term used to refer to central bankers who prefer tight monetary policies and higher interest rates.

However, another matter that crypto stakeholders will be on the lookout for will be how Shin will insert himself into talks about issuing won-backed stablecoins. 

During the World Congress of Economists (ESWC) last year, Shin warned against won-based stablecoins, saying that they are a shortcut to bypassing foreign exchange regulations. He fears that users being able to easily exchange won-stablecoins for dollar-denominated virtual assets via blockchain would open a massive channel that could drain South Korea’s financial reserves during a crisis. 

Furthermore, the BIS annual reports published during his tenure warned that stablecoins often fail to act as stable currencies and pose risks to “currency sovereignty.” 

Shin’s negative outlook on stablecoins suggests that the Bank of Korea may push for much stricter controls or even block the wide-scale adoption of private stablecoins in favor of a central bank digital currency (CBDC).

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