Taiwan’s legislature passed the Virtual Asset Service Act on June 30th, the island’s first dedicated cryptocurrency law, requiring virtual asset service providers (VASPs) to obtain a license from the Financial Supervisory Commission (FSC) before operating.
The law replaces the previous registration regime under the Anti-Money Laundering Act with a prior-approval system. VASPs must secure separate licenses for each business type, including exchange, trading platform, transfer, custody, underwriting, and lending. Traditional financial institutions may also apply to operate these services.
A dedicated chapter governs stablecoins. Issuers need FSC approval, granted only after consultation with the central bank, and must hold full reserve assets at domestic financial institutions, kept separate from their own funds and placed in trust. Stablecoins cannot pay interest or yield, and holders gain priority claims on the reserves if an issuer becomes insolvent.
Penalties rose sharply. Operating without a license now carries up to seven years’ imprisonment and a fine up to NT$100 million ($3.1 million), against two years and NT$5 million previously. Fraud or market manipulation draws three to ten years and fines of NT$10 million to NT$200 million ($310,000 to $6.2 million).
Registered operators must apply within 12 months of the law taking effect and obtain a license within 21 months. The FSC expects to finalize sub-regulations by the end of the first quarter of 2027.
