South Korea is finalizing plans to implement a new AI-driven system for monitoring cryptocurrency transactions ahead of a planned taxation framework set to begin in 2027. The initiative centers on a 3 billion won budget allocated by the National Tax Service, the country’s agency responsible for administering tax policy and enforcing collection. The system aims to increase transparency and enforce upcoming virtual asset tax rules.
Korean Tax Service Advances Digital Surveillance
The National Tax Service has initiated a public bidding process inviting firms to build a sophisticated monitoring platform. The project, listed with a budget valued at approximately $2 million, seeks to bring advanced technology to the agency’s oversight of digital assets. The winning contractor is expected to start the design phase shortly, leading up to a pilot period projected for November and a scheduled full rollout by December 2026.
Officials outlined that the tracking system will incorporate machine learning to identify irregular or suspicious activities within cryptocurrency trading. Collaboration with the Korea Customs Service and the Bank of Korea is set to enhance information sharing and augment government capacity to detect potential tax avoidance schemes.
New Taxation Era For Crypto Beginning In 2027
The government has set January 1, 2027, as the effective date for taxing gains from virtual assets. Any profits above 2.5 million won will face a combined tax rate of 22 percent, which includes both national and local taxes. The National Tax Service has emphasized that the upcoming platform will help ensure accurate reporting, preventing underreporting as the virtual economy expands.
Once operational, the monitoring infrastructure will analyze large volumes of data from digital asset exchanges and wallet addresses. Officials explained that the system is expected to automatically flag transactions indicative of effort to hide gains or evade obligations. The rollout is viewed as a preparatory phase for full tax enforcement on crypto holdings and profits.
Coinbase Responds To U.S. Stablecoin Exemption Allegations
Meanwhile, discussions over crypto taxation have escalated in the United States. With lawmakers debating whether to provide tax exemptions for minor digital currency payments, attention has focused on the approaches favored by industry participants. Block, a financial services and payments company, has campaigned for a broader exemption, encouraging regulators to treat Bitcoin like foreign currency for small transactions.
Media reports recently suggested that Coinbase, a major U.S.-based cryptocurrency exchange, was allegedly pushing for a tax break that would apply exclusively to stablecoin transactions. The company, which maintains a commercial stake in USD Coin (USDC), was reported to have conveyed that Bitcoin is not widely used for everyday payments.
Coinbase’s Chief Policy Officer, Faryar Shirzad, rejected these accusations, labeling them as entirely false. In a direct response, he stated that Coinbase has never opposed Bitcoin adoption and does not back any legislative efforts that could put Bitcoin at a disadvantage.
Faryar Shirzad explained that the company has “never lobbied against Bitcoin” and indicated Coinbase’s commitment to expanding adoption for the digital currency while supporting a fair tax framework for the industry.
Representatives from Block noted that lawmakers now appear to favor limiting tax exemptions to stablecoins. Adam Back, CEO of Blockstream, pointed out that stablecoins typically do not produce significant taxable gains for most retail users, and proposed that extending similar treatment to Bitcoin would benefit its use as a digital currency.
