Taiwan Passes Virtual Asset Law as EY Flags Four Industry Challenges

Taiwan has relied largely on anti-money laundering registration to oversee virtual asset service providers, a framework increasingly tested by the growth of trading, custody and stablecoins. The Virtual Asset Service Act introduces comprehensive licensing and conduct rules under the Financial Supervisory Commission, shifting supervision toward investor protection, cybersecurity and market integrity. The overhaul is expected to raise compliance costs, reshape competitive barriers and bring digital-asset businesses closer to standards applied in traditional finance.

Lawmakers passed the act on June 30, 2026, placing seven categories of virtual asset service providers under a licensing regime. Existing operators must apply within 12 months of the law taking effect and secure approval within 21 months. Stablecoin issuers will need central bank consent, FSC approval and fully backed reserve assets. EY said the industry now faces four central challenges: differentiating services in a more regulated market, designing risk and compliance controls, managing competition and partnerships with traditional financial institutions, and turning real-world asset, or RWA, tokenization into viable products.