Key facts
- Taiwan has enacted its first comprehensive law to regulate the cryptocurrency sector.
- All virtual asset service providers (VASPs) must obtain licenses from the Financial Supervisory Commission (FSC).
- Stablecoin issuers require approval from both the central bank and FSC, with a 100% asset reserve mandate.
- The law imposes strict penalties, including prison sentences and significant fines, for non-compliance and market manipulation.
- VASPs registered for anti-money laundering compliance have a 12-month grace period to apply for licenses.
Taiwan has enacted its first comprehensive law, the Virtual Asset Service Act, to regulate its cryptocurrency sector and integrate with global markets. The legislation mandates that all virtual asset service providers (VASPs), including exchanges, custodians, and lenders, must obtain explicit licenses from the Financial Supervisory Commission (FSC) to operate legally. Stricter standards are introduced for cybersecurity, segregation of customer assets, internal governance, and audits. Stablecoin issuers face additional requirements, needing approval from both the central bank and the FSC, and must maintain 100% asset reserves. Violators of the new law face significant penalties, including prison sentences of up to seven years and fines up to NT$100 million for unauthorized operations, with market fraud and price manipulation carrying even harsher sanctions. VASPs already registered for anti-money laundering compliance will have a 12-month period to apply for licenses after the bill is implemented.