Taiwan’s Legislative Yuan passed the Virtual Asset Service Act on June 30, creating the country’s first licensing framework for stablecoin issuers and other virtual asset providers.
The law requires stablecoin issuers to maintain full reserve backing, hold segregated assets in domestic trust through financial institutions, undergo regular audits and avoid paying interest or other returns to holders.
Existing virtual asset service providers that completed prior anti-money laundering registration have 12 months to apply for licenses and 21 months to secure approval from the Financial Supervisory Commission.
Penalties for illegal operations or stablecoin issuance include up to seven years in prison and fines of up to NT$100 million. The Financial Supervisory Commission will set secondary rules on issuer eligibility and reserve details.
The framework shifts focus to supervised financial infrastructure while leaving room for nonbank applicants to compete if they meet the same standards.
