Taiwan's Legislature on June 30 passed the Virtual Asset Service Act, establishing the island's first dedicated cryptocurrency law. The Financial Supervisory Commission (FSC) was designated as the sole regulator under the 56-article statute. The law replaces an anti-money-laundering registration system with mandatory licensing for all virtual asset service providers, with rules expected to take effect by early 2027. The legislation aims to create a comprehensive regulatory framework for exchanges, custodians, wallet operators, and stablecoin issuers.
Taiwan Introduces Seven-Category Licensing System for Virtual Asset Providers
Under the new regime, exchanges, custodians and wallet operators must obtain FSC approval and meet requirements for internal controls, cybersecurity and business continuity. Providers must secure separate licenses across seven categories—exchange, trading platform, transfer, custody, underwriting, lending and others—ending the practice of offering multiple services under a single registration.
Eight incumbents who previously completed anti-money laundering registration will have 12 months to apply for licenses and 21 months to obtain certification once the law takes effect, with a possible three-month extension.
FSC Establishes Stablecoin Framework Limiting Domestic Issuance to Banks
The act creates Taiwan's first stablecoin framework. Domestic issuance is limited to banks, and tokens must be pegged solely to fiat currencies. Issuers must maintain full one-to-one reserves segregated from company funds and placed in trust with domestic financial institutions.
Foreign-issued stablecoins such as USDT and USDC will be treated as regulated commodities and will require FSC approval for listing on licensed exchanges.
Unauthorized VASP Operations Face Seven-Year Prison Terms and $3.1M Fines
Operating a virtual asset service provider or issuing stablecoins without authorization is punishable by up to seven years in prison and fines of up to $3.1 million (NT$100 million).
FSC to Draft Nine Secondary Legislations for Early 2027 Implementation
The FSC must draft roughly nine pieces of secondary legislation by early 2027. The Virtual Asset Service Provider Association said it would assist firms through implementing rules covering establishment, personnel management, internal controls, abnormal-transaction monitoring, outsourcing and financial-statement preparation. It will also operate committees for listing review, discipline and fraud-prevention compliance.
Lawmakers also adopted a nonbinding resolution requesting the FSC to submit, within one year, a plan to allow licensed firms to offer cryptocurrency derivatives.
FAQ
What did Taiwan's Legislature pass on June 30?
Taiwan's Legislature on June 30 passed the Virtual Asset Service Act, a 56-article statute establishing the island's first dedicated cryptocurrency law and designating the Financial Supervisory Commission as the sole regulator.
What penalties apply to unauthorized virtual asset service providers in Taiwan?
Operating a virtual asset service provider or issuing stablecoins without authorization is punishable by up to seven years in prison and fines of up to $3.1 million (NT$100 million) under the Virtual Asset Service Act.
How many license categories must virtual asset providers obtain under Taiwan's new law?
Providers must secure separate licenses across seven categories—exchange, trading platform, transfer, custody, underwriting, lending and others—under the Virtual Asset Service Act passed on June 30.
