Overview
- Taiwan’s legislature passed the Virtual Asset Services Act to replace a lightweight AML registration system with a full licensing regime for exchanges, custody and transfer services.
- Stablecoin issuers must hold 100% reserves in segregated trust accounts at local banks and face regular audits while being prohibited from paying interest on tokens.
- Existing virtual asset service providers have a phased transition window to comply, with 12 months to file license applications and up to 21 more months to secure approvals.
- Operating without an FSC license can trigger criminal sentences of up to seven years and fines up to NT$100 million, and the law raises penalties for fraud and market manipulation.
- The law orders the Financial Supervisory Commission to propose rules on digital-asset derivatives within a year and is likely to prompt near-term consolidation as smaller firms weigh costly compliance or exit; the move also aligns Taiwan with recent Asian licensing models.