Index
What to know:
New law establishes licensing structure for cryptocurrency businesses
The industry prepares for legal clarity and increased competition
What to know:
Taiwan approves the cryptocurrency licensing law with more stringent compliance requirements nationwide.
Existing companies receive transition periods before mandatory compliance deadlines for licensing.
Banks can enter the market, increasing competition alongside stronger enforcement measures.
Taiwan approved a new crypto law requiring digital asset firms to obtain regulatory licenses, while also introducing stricter rules for stablecoin issuers and more severe penalties for violations.
New law establishes a licensing framework for crypto companies
Taiwan’s Legislative Yuan approved the Virtual Asset Service Act in its third reading on Tuesday. The bill will now go to President Lai Ching-te, who is expected to promulgate it within 10 days. The cabinet will determine later when the law officially takes effect.
Under the legislation, every virtual asset service provider must obtain approval from the Financial Supervisory Commission before operating in Taiwan. In addition to creating a licensing system, the law strengthens cybersecurity requirements, customer asset protection measures, and internal governance standards.
Existing crypto companies that have already completed anti-money laundering registration will receive a transition period. They will have 12 months to apply for licenses after the law enters into force and another 21 months to secure full regulatory approval and other required licenses.
The legislation also introduces tighter oversight for stablecoins. Companies seeking to issue or manage stablecoins must obtain approval from the central bank and the Financial Supervisory Commission. In addition, each stablecoin must be fully backed by reserves.
Authorities have also introduced harsher criminal penalties. Anyone who operates an unlicensed virtual asset business or a stablecoin service could face up to seven years in prison and fines of NT$100 million. Fraud and market manipulation in the crypto market can result in prison terms ranging from three to 10 years, along with higher financial penalties.
The industry prepares for legal clarity and increased competition
The new legislation is expected to reshape Taiwan’s digital asset industry by replacing regulatory uncertainty with clearer operating standards. Kevin Cheng, a Taiwanese lawyer and founder of Harmony Governance Advisors, said that companies that previously operated in legal gray areas will no longer rely on regulatory ambiguity.
He also explained that traditional financial institutions will eventually gain access to the market, creating stronger competition for existing crypto companies. Meanwhile, Titan Cheng, president of Taiwan’s VASP Association and founder of BitoGroup, said the association will work with regulators to develop detailed implementation rules covering licensing, operations, personnel management, and internal controls.
In addition, the group will help crypto companies navigate the transition period and reduce disruption as Taiwan begins implementing its new regulatory framework. Taiwan’s new law provides clearer rules for crypto firms while introducing stricter oversight, licensing requirements, and stronger enforcement. As implementation begins, companies will need to strengthen compliance and prepare for a more competitive digital asset market.
