Why did Taiwan pass the Virtual Asset Service Act?

Taiwan passed the Virtual Asset Service Act to establish its first dedicated legal framework for cryptocurrency businesses and place the Financial Supervisory Commission (FSC) in charge of regulating the sector. The law replaces the previous anti-money laundering registration system with mandatory licensing.

What penalties apply under Taiwan's new crypto law?

Taiwan's Virtual Asset Service Act allows penalties of up to seven years' imprisonment and fines of up to NT$100 million (US$3.1 million) for operating an unlicensed virtual asset service provider or issuing stablecoins without authorisation.

What must existing cryptocurrency businesses do under Taiwan's new law?

Taiwan's Virtual Asset Service Act gives existing anti-money laundering-registered cryptocurrency businesses 12 months to apply for licences and 21 months to obtain certification after the law takes effect. A three-month extension may be granted in some cases.

What happens next after Taiwan passed the Virtual Asset Service Act?

Taiwan's Financial Supervisory Commission (FSC) is expected to prepare about nine pieces of secondary legislation before the framework takes full effect in early 2027. Lawmakers also requested the FSC to submit a plan within one year for allowing licensed firms to offer cryptocurrency derivatives.

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Taiwan passes crypto law with seven-year penalties

Q: How will stablecoins be regulated under Taiwan's Virtual Asset Service Act?

Taiwan's Virtual Asset Service Act permits only licensed domestic banks to issue stablecoins. The law also requires stablecoins to be fully backed 1:1 by fiat currency reserves held in trust, while foreign-issued stablecoins require Financial Supervisory Commission (FSC) approval before listing on licensed exchanges.

Written by Heidi Cuthbert Published Jul 1, 2026, 2:35 AM

Taiwan passed the Virtual Asset Service Act, introducing mandatory licensing for cryptocurrency businesses and naming the Financial Supervisory Commission as the sole regulator.
Unlicensed crypto service providers and unauthorised stablecoin issuers face penalties of up to seven years' imprisonment and NT$100 million (US$3.1 million) in fines.
The Financial Supervisory Commission is expected to complete the supporting regulations by early 2027, when the new framework is due to take full effect.

Taiwan passed the Virtual Asset Service Act, creating its first dedicated cryptocurrency law, requiring all virtual asset service providers to obtain licences and appointing the Financial Supervisory Commission (FSC) as the sector's sole regulator.

The 56-article law replaces Taiwan's anti-money laundering registration system with a mandatory licensing regime covering seven categories of virtual asset services, with the full framework expected to take effect by early 2027.

“Operating a virtual asset service provider or issuing stablecoins without authorisation is punishable by up to seven years in prison and fines of up to NT$100 million,” the legislation states.

The law limits domestic stablecoin issuance to licensed banks, requires all tokens to be fully backed 1:1 by fiat currency reserves held in trust, and classifies foreign-issued stablecoins as regulated products requiring FSC approval before they can be listed on licensed exchanges.

Existing cryptocurrency businesses that previously completed anti-money laundering registration will have 12 months to apply for licences and 21 months to obtain certification after the law takes effect, with a possible three-month extension, and as the announcement relates to legislation there was no share price reaction to report.

The FSC is expected to draft about nine pieces of secondary legislation covering licensing, governance, internal controls, transaction monitoring, outsourcing and financial reporting before the regime is fully implemented.

Lawmakers also approved a non-binding resolution requesting the FSC to present a plan within one year outlining how licensed firms could be permitted to offer cryptocurrency derivatives in Taiwan.