Taiwan's Financial Supervisory Commission Unveils 'Crypto Regulation Blueprint' in Draft 'Virtual Asset Service Act'

Taiwan's Financial Supervisory Commission (FSC) has put forth a draft of the "Virtual Asset Service Act," intending to augment regulatory clarity for businesses engaged in virtual assets and bolster protections for investors.

Taiwan's FSC revealed the draft of the "Virtual Asset Service Act" on March 25, detailing licensing provisions for Virtual Asset Service Providers (VASPs), stablecoin issuance standards, and measures to enhance market integrity and safeguard investors.

Specifically, the draft lays out requirements for VASPs, such as stipulations for organizational structure, capital, and personnel qualifications. The draft also permits banks to issue stablecoins tied to the New Taiwan Dollar, provided that they obtain approval from the FSC and meet the outlined criteria. To uphold market integrity, the FSC is also authorized to conduct inspections, enforce compliance, and impose penalties for non-compliance.

The FSC has begun a 60-day public consultation period for stakeholders to give feedback on the draft, with intentions to submit the finalized law to the Executive Yuan by June 30.

The "Virtual Asset Service Act" initiative highlights Taiwan's dedication to delivering greater regulatory clarity for virtual assets, ensuring investor protection, and combating money laundering. These efforts started in October 2024 when the FSC introduced updated Anti-Money Laundering measures, mandating that all VASPs register with the government by September 2025 or incur penalties, with the regulations taking effect on Jan. 1. As part of these regulations, VASPs are also required to prepare a comprehensive risk assessment report annually and submit it to the FSC by the end of March of the following year.

In addition to providing greater regulatory clarity for the crypto sector, FSC has been actively promoting institutional adoption of cryptocurrencies through various strategic initiatives. Notably, FSC has launched a pilot program for crypto custody services in early 2025. It has also approved several foreign crypto exchange-traded funds for professional investors.