On June 30, 2026, the Legislative Yuan passed the “Virtual Asset Service Act,” marking a pivotal shift in Taiwan’s regulatory landscape. This legislation elevates the oversight of virtual asset service providers (VASPs) from simple anti-money laundering (AML) compliance to a comprehensive framework focused on market order and investor protection. The effective date of the Act is to be determined by the Executive Yuan. 

The Act clearly defines seven categories of service providers, including exchanges, custodians, and lending platforms. These entities are now mandated to implement rigorous internal controls, separate customer assets from corporate funds, and ensure high-level cybersecurity. Furthermore, the law establishes clear civil liability for providers regarding customer damages. A significant highlight is the regulation of stablecoins. Issuing stablecoins within Taiwan now requires approval from both the Central Bank and the Financial Supervisory Commission (FSC). Issuers must maintain 100% reserve assets held in trust and undergo periodic audits to ensure financial stability and transparency. 

To deter market misconduct, the Act imposes severe criminal penalties. Fraudulent activities or price manipulation can result in 3 to 10 years of imprisonment and fines of not less than NT$10 million and not more than NT$200 million. Existing providers are granted a transition period: they must apply for a license within 12 months and obtain formal authorization within 21 months of the Act’s enforcement. This legislative milestone aims to integrate Taiwan into the global digital asset market by establishing a transparent and secure regulatory environment.