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Taiwan Passes Crypto Law, Tightens Stablecoin and Exchange Rules
Taiwan's new law requires FSC licenses for exchanges and custodians, mandates 100% stablecoin reserves, and bans unlicensed operations under threat of prison. Existing firms have 12–21 months to comply. Lawmakers also ordered a derivatives roadmap within a year.
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Taiwan has passed its first standalone crypto law, introducing licensing requirements for exchanges, custody providers, and wallet operators. The legislation puts stablecoins under direct oversight and sets penalties of up to seven years in prison for unlicensed operations.
All Virtual Asset Service Providers must now obtain approval from Taiwan's Financial Supervisory Commission (FSC) before offering services. Instead of a single license, the regime splits crypto businesses into seven separate categories, each with its own compliance demands covering cybersecurity, internal controls, and business continuity laws.
Existing firms that have already completed anti-money laundering registration get 12 months to submit a license application and 21 months to secure final approval. Companies that skip the process face up to seven years in prison and fines of NT$100 million, roughly US$3.14 million.
Stablecoins face the tightest new rules. Issuers must maintain 100% reserve backing, with customer reserves held separately in trust by a domestic financial institution. Those reserves stay protected even if the issuer goes bankrupt. The law also stops stablecoin issuers from paying interest to holders.
USDT and USDC can no longer be freely listed on licensed Taiwanese exchanges. Both need FSC approval before trading, making regulatory sign-off a condition of market access. Only Taiwanese banks will be allowed to issue locally pegged stablecoins initially.