10-27-2026 
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TL;DR: Asia’s digital money race is heating up, with countries taking different approaches to crypto taxation and digital payments. South Korea may delay its crypto gains tax yet again, as lawmakers across party lines push back ahead of its planned January 2027 start. Meanwhile, Korean card giant Shinhan Card and two SBI Group firms are teaming up to pilot yen stablecoin payments between Korea and Japan. China, for its part, has rebuilt its digital yuan platform to support smart contracts and a broader range of payment and settlement uses.
Key Takeaways:
- A fourth postponement of the planned January 2027 crypto gains tax is gaining traction in South Korea amid cross-party opposition and concerns over tax readiness.
- Shinhan Card and two SBI Group subsidiaries are piloting yen-backed stablecoin payments and exploring blockchain-based cross-border payments and trade settlement.
- China has upgraded its digital yuan infrastructure to support smart contracts and expand its use across retail payments, trade financing, and financial settlements.
South Korea’s long-delayed tax on digital asset gains could be pushed back a fourth time, while elsewhere in the region, Shinhan Card teams up with two SBI Group subsidiaries to test yen-backed stablecoin payments between Japan and South Korea, just as China upgrades its digital yuan infrastructure to support smart contracts and a broader range of payment and settlement services.
South Korea’s crypto gains tax faces 4th delay
South Korea’s tax on digital asset gains, scheduled to take effect in January 2027, could face a fourth postponement due to opposition from investors, the industry, and lawmakers from both the ruling and opposition parties.
The proposed tax dates back to July 2020, when the government announced plans to tax annual digital asset income exceeding KRW 2.5 million ($1,888) at a combined rate of 22%, comprising a 20% national income tax and a 2% local income tax. The National Assembly passed the relevant legislation in December 2020, with implementation originally scheduled for January 1, 2022.
The policy subsequently faced sustained opposition from investors and the crypto industry, with critics highlighting inadequate tax-reporting infrastructure, difficulties verifying acquisition costs and tracking transactions conducted through overseas exchanges and decentralized platforms, and the absence of provisions allowing losses to be carried forward into future tax years.
The investor pressure, concerns about administrative readiness, and political considerations contributed to three postponements, first to 2023, then to 2025, and finally to January 1, 2027.
As of October 22, the 2027 implementation date remains in force, and the government has continued preparations to implement the tax under existing law. The National Tax Service (NTS) reportedly plans to finalize a notice by the end of the month outlining detailed tax criteria, including how digital asset income and acquisition costs are calculated and how transfers and lending are defined.
However, the possibility of a fourth postponement has grown. Speaking at a parliamentary audit on Thursday, Financial Services Commission (FSC) Chairman Lee Eog-weon said there were “various opinions” on the tax and that the government was currently gathering them, adding that it would fully consider the circumstances before deciding, as reported by local outlet MoneyToday on October 22.
The opposition People Power Party, whose lawmakers have introduced bills to repeal the tax or delay it until 2029 or 2030, has adopted postponement as its party position, while ruling Democratic Party lawmaker Park Min-gyu has proposed delaying implementation until two years after the first international exchange of digital asset transaction information under the Organisation for Economic Co-operation and Development’s (OECD’s) Crypto-Asset Reporting Framework (CARF).
The latter proposal reflects concerns that South Korea could begin taxing domestic investors before comparable information on overseas transactions becomes sufficiently accessible.
This disunity of opinion has caused increasing frustration from some quarters. On Thursday, Democratic Party leader Kim Min-seok was quoted as saying “we need to sort this out this year,” according to a report from local outlet Yonhap News.
“Recently, there have been many voices and diverse opinions on this matter, so yesterday I raised the issue, suggesting that it seems like the time has come to conduct an intensive review of it at the final stage,” added Kim.
He went on to say that he had proposed this course of action to Deputy Prime Minister and Minister of Finance and Economy Lee Hyung-il, telling him “let’s conduct a final review and reach a conclusion,” as well as emphasizing, “isn’t it time to start intensive discussions on whether to continue taxing virtual assets as is or to supplement the system in some way?”
For now, the tax remains set to proceed, and neither repeal nor further postponement can occur unless the National Assembly passes the relevant legislation, with the issue expected to be taken up in earnest when the Assembly reviews tax law amendments next month.
Shinhan Card and SBI to test yen stablecoin payments
In other South Korean developments, the country’s largest credit card company, Shinhan Card, recently signed an agreement with two subsidiaries of Japanese financial conglomerate SBI Group to test yen-backed stablecoin payments for travelers and explore blockchain settlement for trade between South Korea and Japan.
According to an October 21 press release from SBI VC Trade, the three companies have entered into a Memorandum of Understanding (MOU) to collaborate on the development of a blockchain-based global payment and settlement ecosystem.
“This partnership aims to establish a blockchain-enabled payment and settlement ecosystem that bridges digital assets with traditional financial and payment infrastructures,” SBI said. “Under the MOU, the three companies will progressively advance collaboration across payment services, settlement solutions, and blockchain infrastructure.”
Specifically, the firms will work together to explore various digital asset-based payment services and next-generation payment models, including supporting the growth of the infrastructure and ecosystem of XDC Network, a hybrid blockchain designed for trade finance and enterprise use.
Shinhan Card, who according to SBI serves approximately 20 million card members and operates a wide range of payment services and digital payment businesse, has actively pursued initiatives in Web3 and blockchain-related businesses in recent years, such as completing a proof of concept in April covering six stablecoin and blockchain use cases, and signing a MOU with the Solana Foundation later that month to trial stablecoin payments and non-custodial wallets on the Solana testnet.
As part of its latest collaboration, along with the two SBI companies, it plans to examine the use of stablecoins for cross-border payments and settlements, with a particular focus on exploring the potential integration of digital assets, including a JPY-denominated stablecoin, with in-store payment services.
Recently, three of Japan’s largest banks—Mitsubishi UFJ Financial Group (NASDAQ: MUFG), Sumitomo Mitsui Financial Group (NASDAQ: SMFG), and Mizuho Financial Group (NASDAQ: MFG)—announced that they would be jointly issuing stablecoins during the current fiscal year, ending March 2027, as part of a broader push from Japan to compete in the booming stablecoin sector, which USD-stablecoins currently dominate.
Beyond stablecoins, the two SBI subsidiaries and Shinhan Card revealed that they also intend to expand their cooperation to include international payment and settlement services, including cross-border trade settlement.
“By examining ways to connect existing international remittance and settlement systems with digital asset-based infrastructure, the parties aim to develop more efficient cross border payment and settlement models and strengthen the foundation for digital finance collaboration between Japan and Korea,” SBI said.
While South Korea and Japan explore sovereign stablecoin payments, as a solution, in part, to digital dollarization, China continues to expand and update its central bank digital currency (CBDC) as a state-run alternative.
China upgrades digital yuan system
China has upgraded its digital yuan infrastructure to integrate a wider range of payment and financial services, including an enhanced central bank system for the digital yuan and a framework for smart contract services to lower operating costs and expand the CBDC’s use.
The E-CNY Operation Management Center, established by the People’s Bank of China (PBOC), announced the two developments at a parallel session on the digital yuan of the Annual Conference of Financial Street Forum 2026 in Beijing, according to an October 21 report from state news outlet Xinhua.
The upgrade comes after the digital yuan transitioned to a new operating framework on January 1, 2026, shifting it from a “digital cash” model to a “digital deposit money” model. This meant the e-CNY henceforth operated within the banking system, relying on commercial bank accounts, with technical support and regulatory oversight provided by the PBOC.
Based on the Xinhua report, citing “a PBOC digital currency research official,” the newly upgraded system integrates issuance management, retail and wholesale payments, blockchain and smart contract services, with the aim of lowering system integration and liquidity management costs, and to “support applications ranging from everyday payments to trade financing and financial settlements.”
The digital yuan, or e-CNY, was launched in 2019 by the PBOC and almost immediately became one of the most advanced and widespread CBDCs in the world. By November 2025, the government had processed more than 3.4 billion transactions worth nearly 16.7 trillion yuan ($2.38 trillion).
According to Xinhua, by the end of September this year, cumulative digital yuan transactions had reached 4.3 billion, with a total value of about 31 trillion yuan (about $4.64 trillion). In September alone, the number of transactions reportedly totaled 99.67 million, worth about 1.87 trillion yuan ($280.02 billion); up 12% and 123% year-on-year, respectively.
More recently, this August, the PBOC announced that it has added eight banks to its list of authorized institutions for digital yuan operations, bringing the number of operating institutions to 30.
This drive to expand the digital yuan can be seen as laying down a marker to other jurisdictions, whether it’s those exploring private sector stablecoin solutions or central bank-controlled options, as the race for digital currency dominance continues to heat up.
FAQs
Why has South Korea delayed its crypto tax three times already?
Because of investor and industry opposition, plus concerns about administrative readiness. Critics cite weak tax-reporting infrastructure, difficulty verifying acquisition costs and tracking trades on overseas exchanges and decentralized platforms, and the lack of loss carry-forward provisions. The tax was pushed to 2023, then 2025, then January 1, 2027.
Is the 2027 start date still official?
Yes. As of October 22, the date remains in force, and the National Tax Service is preparing a notice detailing tax criteria. However, the Financial Services Commission chairman said the government is gathering “various opinions,” and the Democratic Party leader said the issue needs to be settled this year.
What will Shinhan Card and SBI actually do together?
They will test yen-backed stablecoin payments for travelers, examine stablecoins for cross-border payments and settlements (including integration with in-store payment services), and explore blockchain settlement for Korea-Japan trade. The effort also supports the growth of the XDC Network, a hybrid blockchain built for trade finance and enterprise use.
How did China’s digital yuan model change this year?
On January 1, 2026, the e-CNY shifted from a “digital cash” model to a “digital deposit money” model, operating within the banking system through commercial bank accounts, with PBOC technical support and oversight. The latest upgrade builds on that. The PBOC also added eight banks in August, bringing authorized operating institutions to 30.
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