Taiwan’s Legislative Yuan passed the Virtual Asset Service Act in its third session. The bill now heads to President Lai Ching-te, who is expected to sign it within 10 days.
Key Takeaways
- Taiwan’s Legislative Yuan passed the Virtual Asset Service Act in its third reading on June 30.
- The oversight shift, according to FSC statements, means the FSC shifts crypto oversight from AML-registration-only to full operational and market-conduct supervision.
- The law, per FSC filings, defines seven virtual asset service provider (VASP) categories, from exchanges to custodians to a catch-all “other”.
- Existing AML-registered firms, per FSC rules, get 12 months to apply for a license and up to 21 months (plus a 3-month extension) to secure full approval.
- Taiwan joins Japan, Singapore, Hong Kong, and the EU under its MiCA regime among jurisdictions that have moved crypto into licensed finance.
What Happened?
Taiwan’s legislature approved the Virtual Asset Service Act on its third reading on June 30, moving crypto oversight beyond narrow anti-money laundering rules. The change reaches every licensed platform coverage of the region, since Taiwan-based exchanges now answer to a full market-conduct regulator rather than an AML registrar.
This, according to FSC statements, shifts supervision of crypto firms from an AML registration system to broader oversight of firm operations and market order. Until now, businesses providing crypto services in Taiwan needed only to complete AML procedures and register.
The bill goes next to President Lai Ching-te, who, per FSC statements, is expected to promulgate it within 10 days, after which the Executive Yuan (the cabinet) sets an effective start date for the rules.
🚨NOW: TAIWAN PASSES KEY CRYPTO FRAMEWORK, ENDING REGULATORY UNCERTAINTY
— Coin Bureau (@coinbureau) July 1, 2026
Taiwan has approved a comprehensive legal framework for crypto, requiring exchanges and stablecoin issuers to obtain licenses before operating while introducing stricter rules on reserves, cybersecurity,… pic.twitter.com/cILLGEcIus
Licensing Rules and the Transition Window
The Act defines seven VASP categories: virtual asset exchanges, trading platform operators, transfer service providers, custodians, underwriters, lending service providers, and a catch-all “other” category. Licensed firms must meet standards on personnel fitness, internal controls and audit, cybersecurity, and the review process for listing and delisting assets. They must also keep customer assets segregated from company funds, disclose financial reports, and bear civil liability toward clients, including for work they outsource.
Firms already AML-registered get a transition ladder: apply for a license within 12 months of the Act taking effect and obtain full approval within 21 months, with a single three-month extension available. Firms that miss the deadline will be barred from continuing to operate.
Stablecoins Face a Higher Bar
Stablecoin issuers answer to two regulators at once. Issuing a stablecoin domestically requires both the central bank’s consent and authorization from the FSC, and issuers must hold full reserve assets in trust, subject to regular audits and public disclosure.
The FSC said in its press release:
Penalties escalate with the offense. Running an unlicensed crypto platform or issuing stablecoins without authorization can bring up to seven years in prison and fines of up to NT$100 million, or roughly $3.1 million. Fraud or market manipulation carries three to 10 years in prison and fines ranging from NT$10 million to NT$200 million, about $314,000 to $6.3 million.
The FSC said it will now draft the secondary rules needed to put the regime into practice, working with industry associations and other stakeholders.
Where Taiwan Sits in the Regional Picture?
Taiwan joins a group of jurisdictions, including Japan, Singapore, Hong Kong, and the EU under its MiCA regime, that have moved crypto out of the regulatory fringes and into licensed finance. The parallel is not just symbolic.
Each of those regimes pairs exchange licensing with a separate, stricter reserve-and-disclosure track for stablecoins, a split visible even in how MiCA treats Decentralized Finance Markets differently from custodial stablecoin issuance. Taiwan’s FSC and central bank (the Central Bank of the Republic of China) now enforce that same divide jointly.
The Act requires stablecoin issuers to obtain approval from the Central Bank of the Republic of China (Taiwan) in addition to FSC authorization, a dual-signoff structure that mirrors how MiCA separates e-money-token issuance from general crypto-asset-service licensing rather than treating stablecoins as just another token category.
That dual-track design points to a throughline beyond this single law: regulators converging on crypto are not simply importing banking-style licensing wholesale, they are singling out stablecoins for tighter, bank-adjacent controls (reserve custody, audits, dual approval) while treating exchanges and custodians under a lighter market-conduct license. Taiwan’s version makes that split explicit by routing stablecoin approval through the central bank rather than the FSC alone, treating payment-like tokens as monetary policy adjacent rather than pure securities market instruments.
CoinLaw’s Takeaway
This is a sequencing law more than a ban. Taiwan is not restricting who can operate; it is dictating the order and standard by which they may. The 12-month application window followed by a 21-month approval deadline gives incumbent exchanges a real runway to build out internal controls, audit trails, and segregated custody rather than exit the market outright.
The stablecoin dual-approval structure signals Taiwan wants issuers answerable to a monetary authority, not just a markets regulator, before any token backed by the New Taiwan dollar or foreign reserves circulates domestically. The practical read for investors and firms watching Asian crypto policy is that Taiwan is following the compliance-first path that Japan and Singapore already set, rather than experimenting with a lighter framework.
The penalty structure, prison terms rather than fines alone, for unlicensed operation or manipulation puts real teeth behind it, a pattern also visible in SEC and CFTC crypto enforcement data tracking the same shift among US regulators. Firms operating only on AML registration should treat the FSC’s forthcoming secondary rules as the next binding deadline, since the license-application clock starts once the Executive Yuan sets the effective date, not on the June 30 passage date itself.
