Taiwan Finally Hands Crypto the Permission Slip It's Been Waiting For 📋

Taiwan's Legislative Yuan passed legislation on Tuesday establishing the country's first formal regulatory framework for digital assets, requiring all virtual asset service providers to register with the Financial Supervisory Commission before operating. The law also mandates that any stablecoin issued in Taiwan receive approval from both the FSC and the central bank, with issuers required to maintain sufficient reserves held by a trustee and undergo regular audits. The FSC said the measure strengthens trader protections and positions Taiwan to integrate with the international crypto market alongside regional peers such as Japan, Singapore and Hong Kong.

The legislation outlines seven categories of VASPs, including exchanges, trading platforms, custodians and lenders, all of which will be subject to rules covering internal controls, audits, cybersecurity systems, crypto listing and delisting procedures, customer asset segregation and financial reporting. Crypto-related fraud and price manipulation are now criminal offenses, carrying prison sentences of three to 10 years and fines ranging from about 10 million New Taiwan dollars ($300,000) to 200 million New Taiwan dollars ($6.3 million). Operating a VASP or issuing a stablecoin without a license can result in up to seven years in prison and fines of up to 100 million New Taiwan dollars ($3.1 million), according to Taiwan's national news agency CNA.

Lawmakers also approved a resolution directing the FSC to submit a proposal within one year on allowing the crypto industry to provide derivative crypto commodity services, with the stated goal of supporting diversified investment products. The FSC said VASPs that complete anti-money laundering registration before the bill takes effect, as well as institutions already operating under agency oversight, must apply for a license within 12 months after implementation. The bill's effective date has not been set and will begin only after publication by the executive branch.