Taiwan Enacts First Crypto Licensing and Stablecoin Law

Taiwan has enacted its first comprehensive law regulating the cryptocurrency industry, establishing a formal licensing regime for service providers and creating a new framework for stablecoins. The Virtual Asset Service Act was passed by the Legislative Yuan on June 30, 2026, and now awaits promulgation by President Lai Ching-te and the setting of an effective date by the cabinet.

The legislation designates the Financial Supervisory Commission (FSC) as the primary regulator, moving the sector from a system based on anti-money laundering registration to one of full operational supervision. The law mandates that all virtual asset service providers (VASPs) must obtain approval from the FSC before operating. It covers seven categories of business, including exchanges, trading platforms, custodians, and lending service providers, requiring them to meet stringent standards for internal controls, cybersecurity, customer asset segregation, and financial reporting.

A key component is the introduction of Taiwan's first regulatory framework for stablecoins. Issuers must secure approval from both the central bank and the FSC and are required to maintain full reserve backing, with those...