Taiwan’s Financial Supervisory Commission released the draft of the “Virtual Asset Service Act,” aiming to enhance regulatory clarity for virtual asset businesses and strengthen investor protections.
On March 25, Taiwan’s FSC unveiled the draft of the “Virtual Asset Service Act,” outlining provisions for licensing of Virtual Asset Service Providers, standards for stablecoin issuance, and measures to enhance market integrity and protect investors.
Specifically, the draft outlines standards for VASPs, including requirements for organizational structure, capital, and personnel qualifications. It also authorizes banks to issue stablecoins pegged to the New Taiwan Dollar, contingent upon obtaining approval from the FSC and meeting the specified criteria. To ensure market integrity, the FSC is also granted authority to conduct inspections, enforce compliance, and enact penalties for non-compliance.
The FSC has initiated a 60-day public consultation period for stakeholders to provide feedback on the draft, with plans to submit the finalized law to the Executive Yuan by June 30.
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The “Virtual Asset Service Act” initiative underscore Taiwan’s commitment to providing greater regulatory clarity for virtual assets, ensuring investor protection, and combating money laundering. These efforts began in October 2024 when the FSC introduced updated Anti-Money Laundering measures, requiring all VASPs to register with the government by September 2025 or face penalties, with the regulations taking effect on Jan. 1. As part of these regulations, VASPs must also prepare a comprehensive risk assessment report each year 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 proactively encouraging institutional adoption of cryptocurrencies through several 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.
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