Taiwan’s Financial Supervisory Commission (FSC) has released a draft of the Virtual Asset Service Act, aiming to enhance regulatory clarity, strengthen investor protections, and establish clear guidelines for virtual asset businesses.
Announced on March 25, the draft legislation introduces a licensing framework for Virtual Asset Service Providers (VASPs), sets standards for stablecoin issuance, and grants the FSC expanded oversight powers to ensure market integrity.
VASP Regulations: Companies must meet specific capital, organizational, and personnel requirements to obtain a license. Stablecoin Issuance: Banks may issue stablecoins pegged to the New Taiwan Dollar (NTD), subject to FSC approval. Regulatory Oversight: The FSC will have the authority to inspect, enforce compliance, and impose penalties for violations.
The FSC has opened a 60-day public consultation period, allowing industry stakeholders to provide feedback before finalizing the law. The draft is expected to be submitted to the Executive Yuan by June 30.
Taiwan’s move toward clearer crypto regulations follows its October 2024 update to anti-money laundering (AML) measures, which mandated VASP registration by September 2025. Under these regulations, all registered VASPs must submit annual risk assessment reports to the FSC by March of the following year.
Additionally, the FSC has been fostering institutional crypto adoption, launching a crypto custody pilot program in early 2025 and approving foreign crypto exchange-traded funds (ETFs) for professional investors.
With the Virtual Asset Service Act, Taiwan aims to strike a balance between innovation and investor protection, ensuring a more secure and regulated digital asset landscape.
Image Credit: Pixabay
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