Taiwan has officially introduced one of Asia’s toughest crypto regulations. The country has passed its first comprehensive crypto law, bringing strict licensing rules for exchanges, tighter stablecoin requirements, and heavy penalties for violations.
The recent move comes right after Taiwan’s lawmaker Dr. Ko Ju-Chun presented a proposal to add Bitcoin to the country’s national reserves.
Taiwan Introduces Strict Licensing for Crypto Firms
The new law requires all Virtual Asset Service Providers (VASPs), including crypto exchanges, wallet providers, custodians, and lending platforms, to obtain approval from Taiwan’s Financial Supervisory Commission (FSC) before operating.
Instead of a single license, crypto businesses will now fall under seven separate licensing categories, each with its own compliance requirements covering cybersecurity, internal controls, and business continuity.
Existing crypto companies that already completed anti-money laundering (AML) registration will receive 12 months to apply for licenses and 21 months to secure final regulatory approval.
Companies operating without approval could face up to seven years in prison and fines of NT$100 million (around US$3.14 million).
Stablecoins Face Their Toughest Rules
One of the biggest changes in the bill involves stablecoins. Under the new framework, stablecoin issuers must maintain 100% reserve backing, with customer reserves held separately in trust by domestic financial institutions.
Meanwhile, those reserves will remain protected even if an issuer becomes bankrupt.
Perhaps the new law also stops stablecoin issuers from paying interest to holders.
More importantly, USDT and USDC can no longer be freely listed on licensed Taiwanese exchanges. Both will now require FSC approval before trading, making regulatory approval a condition for market access. Only Taiwanese banks will initially be allowed to issue locally pegged stablecoins.
Taiwan Joins the Global Push for Crypto Regulation
Taiwan’s new crypto law follows a similar path to Europe’s MiCA rules. This news law also comes soon after the U.S. moved forward with the GENIUS Act for stablecoins.
Rather than acting alone, Taiwan appears to be joining an overall global effort to bring crypto under formal financial regulation.
The law also introduces severe penalties for market manipulation, with offenders facing three to ten years in prison and fines of up to NT$200 million.
Lawmakers have also asked regulators to prepare a roadmap within one year that could eventually allow licensed firms to offer crypto derivatives, signaling that Taiwan is tightening oversight while still leaving room for future market growth.
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