Taiwan passes first crypto and stablecoin framework, with VASPs facing licensing and prison terms

Taiwan’s Legislative Yuan has passed the country’s first law regulating crypto and stablecoins, and the part high-risk payment people will care about is simple: operating as a VASP without approval is now a licensing issue, not a gray-area business model. Stablecoin issuers also face dual approval from the central bank and the Financial Supervisory Commission (FSC), plus reserve, trustee, and audit requirements.

1. The Financial Supervisory Commission (FSC) said the law requires all virtual asset service providers, or VASPs, to obtain regulator approval to operate. Taiwan’s rules cover seven types of VASPs, including exchanges, trading platforms, custodians, and lenders, and they will be subject to internal control and audit rules, cybersecurity requirements, crypto listing and delisting rules, customer asset segregation, and financial reporting.
2. Stablecoins issued in Taiwan must be approved by both the central bank and the FSC. Issuers must maintain sufficient reserves with a trustee and undergo regular audits, which puts reserve management and oversight squarely into the rulebook rather than the product pitch deck.
3. The law is Taiwan’s first to regulate crypto and stablecoins, and the FSC framed it as bringing Taiwan in line with Japan, Singapore, and Hong Kong, which have already passed sector rules in an effort to attract the industry. The FSC also said the bill strengthens protection of traders’ rights and that issuing stablecoins will help Taiwan integrate with the international market and secure a place in the global crypto market.
4. The law bans crypto-based fraud and price manipulation. Violators face three to 10 years in prison and fines from about 10 million New Taiwan dollars ($300,000) to 200 million New Taiwan dollars ($6.3 million). Those operating a VASP or issuing a stablecoin without a license face up to seven years in prison and fines of up to 100 million New Taiwan dollars ($3.1 million), according to Taiwan’s national news agency, CNA.
5. The implementation date is still to be determined, and the law takes effect only after publication by the government’s executive branch. The FSC said VASPs that complete anti-money laundering registration before implementation, and institutions already providing related services under the agency, should apply for a license within 12 months after the bill is implemented. CNA also reported that lawmakers passed a resolution asking the FSC to propose a plan within a year for crypto derivative commodity services.

For PSPs and acquiring partners, the practical point is that Taiwan is moving from “we’ll see” to a licensed market with explicit rules on custody, reserves, audits, and customer asset segregation. That usually means more diligence, more paperwork, and fewer excuses for operators who were planning to wing it.