Taiwan Passes New Cryptocurrency Law... Establishing Regulatory Framework for Stablecoins and Exchanges

Taiwan has passed a comprehensive law regulating cryptocurrency services, introducing a licensing system for stablecoin issuance. The Virtual Asset Service Act, enacted by the Legislative Yuan, defines cryptocurrency businesses by sector and expands regulatory oversight from anti-money laundering measures to broader business operations and market order management. The Financial Supervisory Commission emphasized lifting oversight from anti-money laundering frameworks to comprehensive market health management. The law categorizes VASPs into seven types, mandates internal controls and cybersecurity measures, and establishes detailed exchange operation standards including asset separation and liability provisions. Stablecoin issuers must obtain central bank approval and regulatory permits, with all assets held in trust. Penalties for market manipulation are strengthened, with potential prison terms of three to ten years and fines exceeding $100 million.