Taiwan Enacts Comprehensive Crypto Law with Up to 7 Years Prison for Unlicensed Services
Taiwan’s Legislature approved the Virtual Asset Service Act on June 30, establishing the island’s first dedicated cryptocurrency law and designating the Financial Supervisory Commission (FSC) as the sole regulator.
The 56-article statute replaces an anti-money-laundering registration system with mandatory licensing for all virtual asset service providers, including exchanges, custodians and wallet operators. Providers must obtain FSC approval and meet requirements for internal controls, cybersecurity and business continuity.
Notably, the law requires separate licenses across seven categories: exchange, trading platform, transfer, custody, underwriting, lending and others. Eight firms that previously completed anti-money laundering registration will have 12 months to apply for licenses and 21 months to obtain certification.
The act creates Taiwan’s first stablecoin framework, limiting domestic issuance to banks with tokens pegged solely to fiat currencies. Issuers must maintain full one-to-one reserves segregated from company funds and placed in trust with domestic financial institutions.
Foreign stablecoins such as USDT and USDC will require FSC approval for listing on licensed exchanges. Operating a virtual asset service provider or issuing stablecoins without authorization carries up to seven years in prison and fines up to $3.1 million.
The FSC must draft approximately nine pieces of secondary legislation, with full rules expected to take effect by early 2027.