Taiwan Crypto Licensing Law Passes, Sets 21-Month Deadline

Taiwan's Legislative Yuan passed the Virtual Asset Service Act on June 30, giving the country its first dedicated crypto regulatory framework. The Financial Supervisory Commission said the law replaces the previous reliance on anti-money laundering registration with a full licensing regime covering operational standards, custody, and market conduct.

The FSC recognized seven categories of virtual asset service providers, including exchanges, custodians, underwriters, and transfer service providers. Each regulated entity must obtain a license, segregate customer assets, maintain internal controls, and undergo regular audits with financial reporting obligations.

Existing VASPs that completed AML registration before the law's effective date get a transition period. They have 12 months to file a license application and 21 months to receive final regulatory approval, with a possible one-time extension of up to three months. Financial institutions already offering virtual asset services under existing FSC rules share the same timeline.

Companies operating without prior AML registration do not qualify for the transition. They must stop offering services until they secure a license.

Stablecoin issuers need approval from both the Central Bank and the FSC. They must maintain full reserve backing for each token issued, place reserve assets in trust, and publish regular audits and public disclosures. Taiwan's government said the stablecoin rules bring the country in line with global standards.

Fraud or price manipulation involving virtual assets carries prison sentences of three to 10 years and fines of NT$10 million to NT$200 million, roughly $314,000 to $6.3 million.

The Executive Yuan will set the law's implementation date. Industry participants now have a concrete timeline to restructure compliance operations and apply for licenses.