Taiwan Plans Virtual Asset Law Requiring Overseas Crypto Firms to Establish Local Operations

Taiwan previously regulated the crypto industry primarily through a registration regime under the Money Laundering Control Act, without comprehensive sector-specific legislation. As the virtual-asset market has expanded and fraud cases have proliferated, the Legislative Yuan passed Taiwan’s first dedicated crypto statute, the Virtual Asset Service Act, on its third reading. The law places virtual asset service providers, or VASPs, under a licensing regime. It marks a major milestone for Taiwan’s fintech framework, with implications for both Web3 development and market integrity.

The legislation could formally take effect as early as the first quarter of 2027, and eight Taiwanese VASPs are already preparing to apply for new licenses. The Financial Supervisory Commission’s Banking Bureau said the law would impose three hurdles for stablecoin issuance and introduce heavier penalties for operating without a license or engaging in fraud or market manipulation. Violators could face up to 10 years in prison. Regulators are also encouraging companies including CTBC and Taiwan Mobile to explore stablecoin applications.