- South Koreans can trade crypto tax-free until January 1, 2027.
- Trading physical gold is subject to 10% value-added tax.
- Traders taking “speculative punts” on cryptocurrencies tied to the value of gold.
South Korean investors are snapping up gold-pegged stablecoins amid soaring precious metals prices, as part of a bid to avoid hefty tax bills.
Crypto trading is not yet subject to any form of taxation in South Korea, unlike gold, which is subject to a 10% value-added tax on physical gold bars and jewelry, as well as trading platforms’ commission fees of around 5%. Those who choose to trade gold via the Korea Exchange, meanwhile, often have to pay 22% capital gains tax.
Gold traders must pay over 15% income tax when they sell shares in South Korean gold exchange-traded funds, as well as annual management fees of 0.5-0.9%. By contrast, the only fees crypto traders need to pay in South Korea are commission and transaction fees: typically 0.02-0.05% of the transaction’s total.
“Investors here in South Korea are certainly taking more speculative punts on gold-related tokens nowadays as they see their market caps rise,” Kim Sang-min, a South Korean stock and crypto trader, told DL News. “And the rise in physical gold prices and ETFs is leading more and more South Koreans to any token that has a connection to physical gold.”
Gold-backed coins, such as Tether Gold and PAX Gold, are tradeable digital assets pegged to the value of physical gold. In most cases, one token represents a troy ounce, or a gram, of physical gold. Tether and other companies back their coins with physical gold held in secure, audited vaults.
Experts say investors around the world are dumping higher-risk financial products in favour of traditional “safe havens” like gold. And in South Korea, where conventional crypto trading has suffered a blow at the hands of tariff threats from US President Donald Trump in recent days, the allure of gold is becoming harder than ever to resist.
Gold rush
Gold-backed coins “offer a relative advantage from a short-term investment perspective” due to South Korean tax rules, unnamed analysts told South Korean broadcaster Money Today
Lawmakers have approved an act that, as of 2027, will see crypto profits taxed under capital gains rules at a rate of 20% if their earnings exceed an annual $36,000 threshold.
“With global gold prices showing significant strength, interest in gold-related cryptoassets is also soaring,” Hwang Seok-jin, a professor at Dongguk University’s Graduate School of Information Security, told Money Today.
Only a few gold-related coins are listed on major South Korean exchanges.
Tether Gold trading represents just over 0.6% of 24-hour trading volume, or over $9 million, on Upbit, South Korea’s largest crypto exchange, per CoinGecko data.
Trading trends
Kim told DL News that most domestic traders use overseas crypto exchanges to trade these coins.
South Korean gold prices have soared in recent months. Korea Gold Exchange data shows the price of 1 don, roughly 3.75 grams, of pure gold has risen by almost 100% on January 2025 prices, with the sharpest gains coming in the past few months.
Experts say that gold-pegged coin issuers could become responsible for driving gold prices yet higher in the future.
“As the size of the gold coin market grows, issuers will have to continuously purchase gold,” Campbell Harvey, a professor at Duke University’s business school, told South Korean newspaper Chosun Ilbo. “This, in itself, could further drive up the price of gold.”
Tether Gold’s market cap, which stood at $600 million at the beginning of last year, has risen 283% to reach $2.3 billion in early 2026.
Tim Alper is a News Correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.
