Taiwan’s Legislative Yuan passed the Virtual Asset Service Act on June 30, creating the island’s first dedicated legal framework for crypto service providers and stablecoin issuers. The Finan
Taiwan’s Legislative Yuan passed the Virtual Asset Service Act on June 30, creating the island’s first dedicated legal framework for crypto service providers and stablecoin issuers.
The Financial Supervisory Commission will oversee the new regime, moving Taiwan from an anti-money-laundering registration model toward full licensing, operating rules and market-conduct supervision. The law covers virtual asset service providers, stablecoin issuers and activity tied to crypto trading, custody, transfers, lending, underwriting and other services.
The FSC listed seven VASP categories under the framework: exchange providers, trading platform operators, transfer providers, custodians, underwriters, lenders and other service providers. These firms must obtain approval before operating and comply with rules covering internal controls, audits, cybersecurity, listing and delisting reviews, client asset segregation, outsourcing, financial reporting and civil liability to customers.
The approval follows the Executive Yuan’s April draft, which was designed to protect trader rights, strengthen market trust and bring Taiwan’s crypto rules closer to international standards. The passage puts Taiwan beside jurisdictions such as Japan, the EU, South Korea, Singapore and Hong Kong, where crypto platforms and stablecoin activity have been pulled into formal licensing regimes.
Stablecoins receive a dedicated legal route under the new act. A stablecoin issuer operating in Taiwan must obtain FSC approval, and the regulator must consult the central bank before granting permission.
Issuers must maintain full reserve assets, keep those reserves separate from their own property, place the reserves in trust with financial institutions, submit to regular audits and publish required disclosures. The passed text also blocks stablecoin issuers from paying any form of interest or yield on the stablecoins they issue.
The stablecoin rules give Taiwan a stricter structure than a simple disclosure regime. Reserves must sit in trusted accounts, holders receive priority claims over reserve assets if an issuer fails, and issuance or redemption rules will be shaped through follow-on regulations.
That approach mirrors the global shift toward reserve-backed stablecoin supervision. Europe is already moving through MiCA implementation, including a proposed EBA penalty framework for significant token issuers, while Australia has tightened crypto transfer controls through its Travel Rule regime.
Existing Taiwan-based VASPs that completed AML registration before the law takes effect must apply for an FSC license within 12 months after implementation and obtain approval within 21 months. The FSC can extend that period by three months once if needed.
The law has not taken effect immediately. Its implementation date will be set separately by the Executive Yuan, giving the FSC time to prepare delegated rules, licensing procedures and supervisory details.
The penalty framework is strict. Unlicensed VASP operation or stablecoin issuance can carry up to seven years in prison and fines of up to NT$100 million. Fraud, false statements, concealment or price manipulation tied to virtual asset issuance or trading can carry three to 10 years in prison and fines from NT$10 million to NT$200 million.
Taiwan’s FSC will now draft the supporting regulations needed to implement the act, while existing registered providers face a 12-month application deadline and a 21-month approval window after the law formally takes effect.
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