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Taiwan’s Legislative Yuan Passes the Virtual Assets Service Act
Taiwan’s Legislative Yuan Passes the Virtual Assets Service Act
Eddie Hsiung/Min Li/Casey Ler
Taiwan's Legislative Yuan passed the Virtual Asset Service Act (the "Act") on June 30, 2026. We summarize below certain major provisions of the Act for your reference:
1. Strengthen the Supervision of Virtual Asset Service Providers
The Act explicitly defines the types and scope of Virtual Asset Service Providers ("VASP"), including exchangers, trading platform operators, transferors, custodians, underwriters, lenders, and other service providers, totalling 7 categories. Notably, the Act newly adds "lenders" as a category of VASPs and general provisions about"other service providers" to ensure new service types remain understatutory oversight. Each VASP must, according to the type of services it provides,obtain approval and license from the Financial Supervisory Commission ("FSC") before commencing operations. The Act further regulates VASPs' financial and business operations, the qualifications of responsible persons and personnel, internal control and audit systems, cybersecurity management, mechanisms for reviewing the listing and delisting of virtual assets, segregation of customer assets, outsourcing arrangements, civil liability to customers, and financial reporting obligations.
2. Clear Regulation of Stablecoin Issuance and Management
The Act requires stablecoin issuers in Taiwan to obtain approval from both the Central Bank and the FSC, maintain full reserve backing, with segregated reserve assets held in trust, conduct regular audits and comply with periodic information disclosure requirements.
3. Prevention of Unfair Market Practices
The Act explicitly prohibits unfair practices such as fraud, or price manipulation. Violations may lead to imprisonment of threetoten years and criminal fines between NT$10 million and NT$200 million.
4. Transition Period for Existing VASPs
The Executive Yuan will determine the effective date of the Act. VASPs that completed anti-money laundering registration before the Act takes effect, or financial institutions that have been providing related services in accordance with the FSC’s regulations, shall apply for a license from the FSC within 12 months and obtain regulatory approval within 21 months. If necessary, the licensing deadline may be extended once by up to 3 months.
After the Act takes effect, the supervision of VASPs will shift from the current anti-money laundering registration mechanism to a formal licensing regime, which will have a significant impact on the establishment and operation of VASPs. Our firm has long-standing, dedicated practices in the financial and virtual asset industries, and is well-versed in various legal, compliance, and regulatory issues related to their establishment and operation. If you have any questions or require assistance, please feel free to contact us.