Taiwanese authorities have approved a new draft of its important cryptocurrency legislation, imposing strict penalties for unlicensed or fraudulent activities related to stablecoins and other digital assets.
Taiwan approves $6 million in fines to combat cryptocurrency fraud
On Friday, according to local news agencies I mentioned The Executive Yuan passed the Virtual Asset Service Act (VASA) on April 2, marking a major step to regulate crypto assets in Taiwan.
VASA, introduced by the Financial Supervision Commission (FSC) last year, supports efforts by Taiwanese authorities to create a comprehensive cryptocurrency framework for virtual asset service providers (VASPs) and stablecoin issuers.
In 2024, the Financial Services Commission will reform its anti-money laundering (AML) regime. range To include cryptocurrency businesses, adding stricter AML guidelines for virtual asset service providers and requiring all digital asset companies to complete AML registration by September 2025.
Premier Cho Jong-tae explained that the new framework, which will be implemented in four gradual phases, includes industry self-regulation and an anti-money laundering compliance registration system. He added that these measures aim to enhance the security of virtual asset transactions, pilot custody services, and support the growth of local financial innovation.
According to reports, the draft requires virtual asset service providers to operate exclusively in this field and meet specific criteria for company name, organizational structure and capital. Financial institutions can also operate VASP services in addition to their other businesses, if approved.
In addition to that special Systems It will be customized to suit the nature of each service provider. For example, trading platforms will be required to establish clear guidelines for listing and delisting of virtual assets.
The draft also includes severe penalties for unlicensed and fraudulent activities, with crimes involving counterfeiting, concealing cryptocurrencies or manipulating prices risking three to 10 years in prison and fines of up to NT$200 million, with a value of $6.25 million.
Meanwhile, companies that issue stablecoins without a license could face up to seven years in prison and fines of up to NT$100 million, or about $3.13 million, according to the project.
New stablecoin regulations ban interest payments
Officials shown The main differences between the recently passed VASA draft and the FSC’s original text relate to stablecoin guidelines, which include issuance and redemption regulations, limits on interest or returns, internal oversight and cybersecurity management.
Under the new draft, stablecoins must be issued and redeemed at nominal value, and issuers may not reject redemption requests from holders. Issuers are also prohibited from paying interest or royalties to holders of the stablecoins they issue, in line with international trends.
Finally, exporters must establish and maintains Robust internal control and auditing systems, along with information security management mechanisms, ensure the correct issuance and recovery of stablecoins.
FSC Vice Chairman Chen Yinliang emphasized that stablecoin issuance is not currently limited to banks, but noted that financial institutions are “generally in a better position to meet the relevant requirements” due to their stronger capital and risk management capabilities.
For other operators, different capital thresholds and operating guarantee requirements will be set based on the nature of their business, with further details to be announced after the legislation is formally passed.
In December, FSC Chairman Peng Jinlong open The island’s first regulated stablecoin could debut this year. As reported by Bitcoinist, regulations focused on stablecoins will be developed within six months following VASA approval, setting the launch of locally issued tokens pegged to the NTD or US dollar in the second half of 2026.
Vice Chairman Chen added that the regulator will adopt a “gradual opening-up” model, and relevant regulations will be developed by the authorities together with the central bank.
The total crypto market capitalization is at $2.29 trillion on the one-week chart. Source: TOTAL on TradingView
Featured image from Unsplash.com, chart from TradingView.com
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