Taiwan has passed the Virtual Asset Servicing Law, giving cryptocurrency exchanges and stablecoin issuers a clear licensing path after years of legal uncertainty.
summary
- Taiwan’s new cryptocurrency law requires exchanges and other virtual asset companies to obtain FSC licenses.
- Stablecoin issuers must obtain approval from the central bank and the Financial Services Commission (FSC) while maintaining full reserve support.
- Existing registered cryptocurrency companies get a transition period before the new licensing regime is fully implemented.
Taiwan’s Legislative Yuan passed the Virtual Asset Service Law on its third reading on June 30, sending the draft law to President Lai Ching-tei for the next step. The Financial Supervision Commission said the law moves oversight of cryptocurrencies in Taiwan from anti-money laundering registration to broader supervision of operations, market system and customer protection.
The law creates rules for seven types of virtual asset service providers, including exchanges, trading platforms, transfer companies, custodians, insurance companies and lending providers. The law covers internal controls, cybersecurity, review of asset lists, segregation of client assets, outsourcing, civil liability and financial reporting, according to the law. FSC statement.
Taiwan sets new licensing rules for cryptocurrency companies
Under the new law, cryptocurrency companies must obtain approval from the Financial Services Commission (FSC) before operating. Existing companies that have already completed their anti-money laundering registration before the law comes into effect will have 12 months to apply for approval and 21 months to obtain the required licence, according to the Financial Services Commission.
The law also gives companies limited leeway if more time is needed. The Financial Services Commission said the transition period may be extended by three months, but only once. Companies that fail to complete the process by the deadline will not be allowed to continue virtual asset business in Taiwan.
Stablecoins get the role of central bank
Stablecoin issuers will need approval from both Taiwan’s central bank and the Financial Services Commission (FSC) before issuing tokens in the country. The law requires issuers to maintain full reserve assets, place reserves in a trust and make regular audits and public disclosures, according to the FSC.
As previously reported by crypto.news, Taiwan’s FSC did this earlier Planned A draft law would allow local banks to issue stablecoins pegged to the new Taiwanese dollar. This plan gave the central bank a role in supervising stablecoins and granted Financial Services Commission (FSC) approval for domestic stablecoins.
The final law also provides criminal penalties for unlicensed activities and market abuse. Focus on Taiwan I mentioned Illegal VASP operations or stablecoin issuance could result in imprisonment of up to seven years and fines of up to NT$100 million, or about $3.14 million.
Fraud and market manipulation carry harsher penalties. Perpetrators could face three to 10 years in prison and fines ranging from NT$10 million to NT$200 million, according to Focus Taiwan.
The new rules end the legal gray area
The law gives Taiwan’s cryptocurrency sector a formal legal footing after a period in which many companies relied on anti-money laundering registration rather than a full license. the Legislative document He said the law aims to protect customers, support the development of the sector, and bring Taiwan closer to global standards used in markets such as the European Union, Japan and South Korea.
Moreover, the FSC Released Virtual Asset Service Bill of March 2025 with licensing rules for cryptocurrency companies, stablecoin standards and investor protection measures. The new section turns this draft directive into a law awaiting its issuance and effective date by the Council of Ministers.
Previously, crypto.news I mentioned That Taiwan’s central bank and the Financial Services Commission (FSC) were pushing tougher rules for stablecoins while lawmakers were discussing the government’s seized cryptocurrency holdings. That previous discussion showed how digital assets have moved from a narrow compliance issue to a broader policy topic in Taiwan.
The FSC said it will continue to draft the approved subrules and will consult with industry groups and other stakeholders. The next phase will decide how licensing standards, employee rules, internal controls and stablecoin procedures will work in practice.
