Taiwan has taken a major step toward regulating digital assets after lawmakers approved the country’s first comprehensive crypto law, creating a legal framework for virtual asset service providers (VASPs) and stablecoin issuers.
The legislation, passed by the Legislative Yuan, requires all crypto businesses operating in Taiwan to obtain approval from the Financial Supervisory Commission (FSC) before offering services. The move establishes clear rules for the sector while strengthening oversight and investor protection.
Taiwan lawmakers pass crypto and stablecoin billhttps://t.co/b4A43U24Nz pic.twitter.com/ZETlyTN9GY
— Taiwan News (@TaiwanNewsEN) July 1, 2026
The law also introduces a regulatory system for stablecoins, making Taiwan one of the latest Asian markets to adopt dedicated digital asset legislation.
What does the new crypto law require?
Under the new framework, all VASPs must obtain a license from the FSC to legally operate in Taiwan. The law covers seven categories of crypto businesses, including exchanges, trading platforms, custodians, lending platforms and other digital asset service providers.
Licensed firms will be required to maintain internal control systems, conduct regular audits, strengthen cybersecurity, separate customer assets from company funds, and comply with financial reporting standards. They must also establish clear procedures for listing and delisting cryptocurrencies.
The FSC said the new rules are designed to improve market transparency while offering stronger protection for crypto users.
Stablecoins issuers face increased licensing system
The legislation introduces a licensing system for stablecoin issuers operating in Taiwan.
Before issuing a stablecoin, companies must receive approval from both Taiwan’s central bank and the FSC. Issuers will also be required to maintain sufficient reserve assets with a trustee and undergo regular audits to ensure the tokens remain fully backed.
Officials believe the framework will support Taiwan’s integration into the global digital asset market while encouraging responsible innovation in the growing stablecoin sector.
In 2025, Taiwan’s FSC unveiled a draft law that will allow local banks to issue stablecoins pegged to the New Taiwan Dollar (TWD). The draft law established strict requirements for stablecoin issuance, including qualification standards for issuing firms and rules for token reserve allocation.
Tough penalties target illegal crypto activities
The new law also introduces tougher penalties for crypto-related crimes, including fraud and market manipulation.
Individuals found guilty of manipulating crypto markets or engaging in fraudulent activities could face prison sentences ranging from three to 10 years, alongside fines of between 10 million and 200 million New Taiwan dollars.
Operating a crypto business or issuing a stablecoin without a license could result in up to seven years in prison and fines of up to 100 million New Taiwan dollars.
The law will take effect after it is officially published by Taiwan’s executive branch. Existing crypto firms that have already completed anti-money laundering registration will have 12 months after the law takes effect to obtain the required licenses.
Lawmakers also directed the FSC to submit a proposal within one year on developing a regulatory framework for crypto derivatives, aiming to expand investment opportunities while supporting the long-term growth of Taiwan’s digital asset industry.
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