Taiwan's legislature has passed a law establishing a regulatory framework for the crypto industry, including rules for crypto trading platforms and stablecoin issuers.
The Legislative Yuan passed the "Virtual Asset Service Act" in its third reading on Tuesday, officially sending the bill to President Lai Ching-te's desk. Lai is expected to promulgate the law within 10 days, with the cabinet to determine its effective date.
Under the act, virtual asset service providers must obtain approval from the Financial Supervisory Commission (FSC) before operating, according to a Tuesday statement from the financial watchdog. The law also introduces stricter requirements on cybersecurity, client asset segregation, and internal controls.
Currently, Taiwan requires businesses or individuals providing crypto services operating in Taiwan to complete anti-money laundering (AML) procedures and register their service capacity. Once the new law takes effect, platforms that have already completed AML registration will have 12 months to apply for a license and 21 months to secure FSC approval and other relevant licenses.
Companies seeking to issue or manage stablecoins must also obtain approval from both the central bank and the FSC, and maintain full reserve backing, per the statement.
