Taiwan Eyes First-Quarter 2027 Launch for Virtual Asset Rules

Taiwan’s Financial Supervisory Commission has made a stronger regulatory framework for virtual-asset service providers a policy priority as it seeks to balance investor protection with financial innovation. Stablecoins are a central issue because their links to fiat currencies could bring digital assets deeper into the payment system, requiring clear rules for eligible issuers, reserve assets, governance and regulatory oversight.

FSC Chairman Peng Chin-lung said the regulator will continue adapting its rules and advance the Virtual Asset Service Act alongside nine related regulations. The measures will cover supervision of virtual-asset service providers and the proposed opening of stablecoin issuance. The broader regime is scheduled to take effect in 2027, with the nine supporting regulations potentially coming into force as early as the first quarter of that year.

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.

Taiwan currently regulates virtual asset service providers (VASPs) through anti-money laundering registration, but most of the world's 10 largest exchanges have yet to register legally in Taiwan, leaving gaps in oversight and fraud prevention. The Financial Supervisory Commission (FSC) is advancing a Virtual Asset Service Act that would establish comprehensive rules covering investor protection, asset custody and operators' responsibilities.

The Legislative Yuan's Finance Committee recently approved the draft at its initial review. FSC Chairperson Thomas Huang said overseas VASPs would have to establish a branch company or branch office in Taiwan through one of two pathways to come under local supervision. Virtual asset derivatives would be restricted to eligible investors, with leverage caps set by the FSC. The commission also plans to finalize custody guidelines within six months after the law takes effect.