When Korea begins taxing cryptocurrency next year, buyers who use stablecoins such as Tether (USDT) to purchase goods or services will owe tax on any gains from exchange-rate moves and price fluctuations in the coin, according to confirmed information. With a won-based stablecoin in the pipeline and stablecoins already used to trade other coins and to settle payments for artificial intelligence agents, critics say separate tax rules are needed.
"Under the income tax law, stablecoins are taxable when they are converted into won or exchanged for other cryptocurrencies," a senior government official said on the 13th. "Tax is also levied on gains that arise when they are used for payments, including purchases of goods and services." Gains from converting cash dollars are currently untaxed. Stablecoins are an exception.
Dollar-pegged coins also carry a "kimchi premium." From June 19, 2024, through the 10th of this month, the USDT premium on Upbit averaged 1.09% and peaked at 8.55%. On 599 of the 814 days, or 73.6%, the domestic price was higher than overseas prices. The resulting price gain is also counted as taxable income, adding to the tax burden. "When stablecoins are used as a means of payment, they need to be treated differently from transactions made for investment purposes," said Hwang Suk-jin, a professor at Dongguk University's Graduate School of International Information Protection.
