When does the Virtual Asset Service Act take effect?

The Act passed the Legislative Yuan on Tuesday. The Financial Supervisory Commission is expected to publish implementing rules and the licensing application timeline in the coming weeks, with a transition period for existing operators.

Does the law apply to foreign crypto exchanges?

Yes. Consultation drafts included an extraterritorial hook that captures foreign firms soliciting Taiwanese users, and the FSC will need to grant approval before those firms can operate domestically.

What does it mean for stablecoin issuers like Tether and Circle?

Both the issuer and the reserve model must receive FSC approval. Circle has moved aggressively into Asian licensing regimes with USDC; Tether has historically been more selective, and its filing pace in Taiwan will be watched closely.

How does Taiwan's approach compare to the rest of Asia?

It tracks Japan's 2023 payment services framework and Hong Kong's 2025 Stablecoin Ordinance more closely than the lighter regimes in parts of Southeast Asia. Reserves under supervision, redemption enforced, unlicensed issuance blocked.

Taiwan Passes Virtual Asset Service Act, Bringing Crypto Exchanges and Stablecoin Issuers Under FSC Approval

Taiwan's legislature passed the Virtual Asset Service Act on Tuesday, a bill that pulls crypto exchanges and stablecoin issuers onto Financial Supervisory Commission approval and formalises what has been a lightly policed corner of one of Asia's wealthier markets. The vote in Taipei ends nearly two years of drafts, industry pushback, and FSC consultations. It puts Taiwan alongside Hong Kong, Japan, and Singapore as jurisdictions that now gate crypto firms behind a full licensing regime rather than an AML registration.

By Clara Hoffmann· AI-assisted· L2 & scaling

What happened

Taiwan's Legislative Yuan passed the Virtual Asset Service Act on Tuesday, per a report from Crypto.News, ending a drafting process that stretched back to 2024 and multiple FSC consultation rounds. The bill lifts crypto firms out of the AML-registration regime that has governed local exchanges and places them under the Financial Supervisory Commission, the same regulator that oversees Taiwan's banks, brokerages, and insurers. Firms that want to serve Taiwanese users, whether they run a spot exchange, a custody desk, or issue a stablecoin, will need explicit FSC approval before they operate. Foreign firms are captured too, in what the FSC has flagged in earlier consultation drafts as an extraterritorial hook aimed at offshore venues that solicit Taiwanese customers.

Stablecoin issuers get the tightest treatment. The bill requires FSC sign-off on the issuer, on the reserve model, and on the redemption terms offered to holders. That is closer to Japan's payment services framework and Hong Kong's stablecoin ordinance than to the lighter-touch regimes still running in parts of Southeast Asia. The FSC is expected to publish implementing rules and the timeline for existing operators to file applications in the coming weeks.

Why it matters

Taiwan is not a mega-market for crypto, but it sits in a corridor that matters. Domestic exchanges MaiCoin and BitoPro have run for years under AML registration alone, and Taiwanese retail has been an active buyer through USDT-denominated OTC channels. The Act closes that regulatory gap. It also sets the terms on which foreign issuers such as Tether and Circle can offer stablecoins to Taiwanese users, and it hands the FSC a formal tool to deny or revoke licences.

The stablecoin piece is where the passage bites hardest. FSC approval of both the issuer and the reserve model tracks the direction of travel across Asia. Japan finalised its stablecoin regime in 2023. Hong Kong's Stablecoin Ordinance took effect in 2025. Singapore's MAS framework has been iterating since 2023. Taiwan is arriving late but landing in the same place: reserves under supervision, redemption enforced, unlicensed issuance blocked from the domestic market.

Taiwan Passes Virtual Asset Service Act, Bringing Crypto Exchanges and Stablecoin Issuers Under FSC Approval

What happened

Why it matters

Market impact

What to watch

Disclaimer

Key takeaways

Frequently asked

Sources