South Korea Delays Crypto Tax to 2027, Eyes Global Trends

South Korea has reaffirmed its stance to embrace cryptocurrencies amid ongoing political turbulence. On December 18, a government representative stated:

“The government is not negative on cryptoassets. As regulations and related systems are still in the process of being built, we decided to defer [the crypto tax].”

This announcement follows significant political challenges, including the impeachment of President Yoon Suk-yeol, which has left the country in a state of limbo. The People’s Power Party, leading the interim administration, aims to maintain economic stability and finalize the 2025 national budget.

Crypto Tax Delayed Until 2027

The National Assembly recently voted to delay the implementation of the controversial crypto tax until 2027. The postponement provides the government with more time to establish a comprehensive regulatory framework. Financial regulators and the central bank are currently drafting policies to:

• Protect investors
• Encourage innovation
• Ensure financial stability

A government official highlighted South Korea’s intent to monitor global crypto trends, particularly in the United States:

“The government is watching global crypto trends, including [policies from] the United States. Concrete actions will come after the new U.S. administration takes office.”

This cautious approach aligns with South Korea’s strategy to observe international shifts, especially under President-elect Donald Trump’s leadership.

Robust Crypto Trading Amid Political Uncertainty

Despite political turmoil, trading activity on major South Korean exchanges such as Bithumb and Upbit remains strong. A weaker Korean Won against the U.S. dollar has driven many local investors to use cryptocurrencies as a hedge against inflation and currency volatility.

Global Competition and Bitcoin “Space Race”

The Korbit Research Center has noted the intensifying global competition for Bitcoin, labeling it as a strategic asset. Korbit’s report highlights geopolitical implications:

“The race to secure Bitcoin at a national level is already underway. If the U.S. Bitcoin Act is enacted, the so-called ‘Bitcoin space race’ among nations could become a reality.”

In the United States, Senator Cynthia Lummis recently emphasized the need for a national Bitcoin reserve, stating:

“America won the Space Race. Now America must win the Bitcoin Race.”

This call underscores Bitcoin’s rising importance as a geopolitical tool.

Meanwhile, nations like China and Russia are closely monitoring developments:

• China: While maintaining its internal ban on cryptocurrency trading, analysts speculate that China may consider strategic Bitcoin reserves.
• Russia: President Vladimir Putin acknowledged Bitcoin’s potential, particularly as a hedge against frozen overseas reserves.

Challenges Ahead for Bitcoin Adoption

Despite growing global interest, challenges persist. Federal Reserve Chair Jerome Powell dismissed the idea of the Fed holding Bitcoin:

“We’re not allowed to own Bitcoin. The Federal Reserve Act says what we can own, and we’re not looking for a law change.”

Powell’s comments highlight the divide between Bitcoin’s rising international adoption and U.S. institutional limitations.

South Korea’s decision to delay crypto taxes until 2027 signals its commitment to balancing regulation and innovation while closely observing global trends. As geopolitical rivalries escalate, Bitcoin is increasingly viewed as a strategic asset. With the U.S., China, and Russia positioning themselves, the so-called “Bitcoin space race” appears to be on the horizon, shaping the future of global finance.