Taiwan has officially enacted one of the toughest crypto laws in Asia. The country has passed its first crypto privacy law, introducing stricter exchange licensing rules, stablecoin requirements, and heavy penalties for violations.
The latest the move comes just after completing the law in Taiwan Dr. Ko Ju-Chun proposed to add Bitcoin to the national database.
Taiwan Introduces Strict Licensing for Crypto Industry
The new law requires that all Virtual Asset Service Providers (VASPs), including crypto exchanges, wallet providers, custodians, and lending platforms, get permission from Taiwan’s Financial Supervisory Commission (FSC) prior to operation.
Instead of a single certification, crypto businesses will now fall under seven certification categories, each with its own requirements for cybersecurity, internal control, and business continuity.
Existing crypto companies that have already completed anti-money laundering (AML) registration will have 12 months to apply for licenses and 21 months to obtain final approval.
Companies operating without a license can face up to seven years in prison and a fine of NT$100 million (about US$3.14 million).
Stablecoins Meet Their Toughest Regulations
One of the a big change in the bill concerning stablecoins. Under the new system, stablecoin issuers must maintain 100% support reserves, with customer reserves held separately by domestic financial institutions.
Meanwhile, the deposit will remain protected even if the issuer is insolvent.
The new law may also stop stablecoin issuers from paying interest to their holders.
Importantly, USDT and USDC can no longer be freely traded on Taiwan’s official exchanges. Both will require FSC approval before commercialization, making formal approval a way to gain access to the market. Only Taiwanese banks will be allowed to issue local stablecoins.
Taiwan Joins Global Push for Crypto Regulation
Taiwan’s new crypto law follows the same path as Europe’s MiCA law. The law of this matter also comes recently as the US went ahead with the GENIUS Act for stablecoins.
Rather than acting alone, Taiwan appears to be joining international efforts to bring crypto under financial regulation.
The law also imposes severe penalties for market manipulation, with offenders facing three to ten years in prison and a fine of up to NT$200 million.
Lawmakers have also asked regulators to prepare a roadmap within a year that would eventually allow licensed companies to issue crypto derivatives, indicating that Taiwan is expanding oversight and leaving room for market growth.
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