Taiwan legislature passes crypto law covering trading platforms and stablecoins

Taiwan's legislature passed the Virtual Asset Service Act, moving the market beyond anti-money laundering registration into a broader licensing and supervisory regime for virtual-asset service providers and stablecoin issuers. The law places crypto firms under Financial Supervisory Commission oversight, requires trading platforms to secure FSC approval, and gives existing AML-registered operators 12 months after the law takes effect to apply for licenses and 21 months to obtain approval. For stablecoins, the framework requires full reserve backing, segregated reserve assets held in trust through domestic financial institutions, regular audits and a prohibition on paying interest or other returns to holders. The structure raises the bar for issuers by tying scale to approval, reserve management, custody, disclosures and redemption capacity, giving banks, trust companies, auditors and compliance-heavy firms an early infrastructure advantage even if nonbank issuers are not ruled out. Illegal VASP operations or stablecoin issuance can draw up to seven years in prison and fines of up to NT$100 million, while fraud or market manipulation can carry prison terms of three to 10 years and fines of NT$10 million to NT$200 million.