Legislative Acts

Virtual Asset Service Act

The Virtual Asset Service Act marks Taiwan’s move from an anti-money-laundering registration regime toward a dedicated legal framework for virtual asset services. Legislator Ju-Chun Ko introduced a member draft on March 20, 2026, arguing for an enforceable framework that balances investor protection, financial order, industry innovation, and international alignment. The Finance Committee completed committee review on June 3, 2026, and the Legislative Yuan passed the act on third reading on June 30, 2026, establishing Taiwan’s first dedicated virtual asset law.

Resource Hub

Deliberation Video

Review Focus: Supervisory Capacity, Proportionality, and Transition

Legislator Ko’s draft did not merely call for virtual asset businesses to be brought under regulation. It pushed the framework in three practical directions: the competent authority must have sufficient dedicated capacity; regulatory duties should be proportionate to business risk; and users, victims, and existing workers need clear protection during the transition to a licensing regime.

Cross-reading Ko’s draft, the Finance Committee-approved version, attached resolutions, and deliberation materials shows several concrete changes in the review process:

1. Supervisory capacity became a legislative issue: Ko’s Article 2 proposed dedicated FSC units and staff for the act. Although the committee version did not keep the same wording in the article, attached resolutions call for continued review of staffing adequacy and support from the Directorate-General of Personnel Administration where needed, making implementation capacity a formal issue.
2. The discussion moved from one-size-fits-all thresholds to risk-based supervision: Ko argued that operating bonds and prudential financial requirements should vary by service category and business scope, so lower-risk businesses are not shut out by excessive thresholds while higher-risk businesses receive stronger safeguards. The committee version keeps the architecture for the competent authority to set business and financial management rules and repeatedly reflects differentiated management by business type.
3. Existing market activity was built into the transition design: Ko emphasized that moving from AML registration to licensing should not create a legal vacuum. The committee version’s Article 55 gives existing registered VASPs and qualified financial institutions 12 months to apply, 21 months to obtain a license, and a possible 3-month extension when necessary.
4. Customer protection and anti-fraud controls were balanced by proportionality: Ko warned that suspending deposits, withdrawals, or transfers should not become indefinite, especially for innocent users caught by abnormal-flow controls. That concern is also reflected in attached resolutions calling for clearer procedures, customer protection, and supervisory rules.
5. Token listing moved away from bottlenecked prior approval: For exchange listings, Ko argued that platforms should follow standards set by the competent authority and remain responsible for review, while filing or reporting mechanisms should reduce single-point bottlenecks. The committee version’s Article 25 requires platforms to set listing review standards and procedures and file listed assets with the competent authority.
6. Stablecoin rules were designed with transition flexibility: Ko was concerned that internationally circulating stablecoins such as USDT and USDC could be abruptly cut off once the act takes effect. The committee version’s Article 35 preserves regulatory flexibility with the phrase “unless otherwise provided by the competent authority” and requires the FSC to consult the Central Bank in setting rules.
7. Illegal manipulation was separated from reasonable market management: The committee version’s Article 42 keeps an exception for measures taken by VASPs under competent-authority rules to maintain price balance in the trading market. This avoids treating liquidity maintenance or slippage reduction as the same as market manipulation.
8. Victim recovery adopted an in-kind virtual asset logic: Ko argued that when the injured property is virtual assets, the state should not presume conversion into cash. The committee version’s Article 47 explanation states that when criminal proceeds to be returned or confiscated are virtual assets, the relevant laws should in principle return or confiscate them as virtual assets.

Overall, Ko’s contribution was to move the debate beyond whether Taiwan should legislate. The review instead had to confront how to prevent over-regulation, under-regulation, and implementation failure at the same time. The bill therefore now addresses supervisory capacity, international standards, industry transition, consumer protection, platform responsibility, stablecoin continuity, and victim recovery in more operational terms.

Third-Reading Highlights

The third-reading Virtual Asset Service Act moves Taiwan from AML registration to a full framework for licensing, customer protection, stablecoin supervision, and market-order rules. Key designs include:

1. Competent authority and international cooperation: The FSC is the competent authority and may cooperate with foreign governments, institutions, and international organizations on information exchange, technical cooperation, and assistance with investigations.
2. VASP categories and licensing: The act defines exchange providers, trading platform providers, transfer providers, custody providers, underwriting providers, lending providers, and other VASPs; unlicensed operation is prohibited.
3. Customer asset protection: Customer assets must be segregated from proprietary assets; customer fiat balances must be entrusted or fully guaranteed by a bank; custodians must maintain reconciliation measures and engage accountants to issue reports.
4. Disclosure and listing review: Exchange and underwriting providers must verify virtual asset white papers; trading platforms must establish listing and delisting standards and procedures and file assets with the competent authority.
5. Industry association and training: VASPs must join an industry association, which is responsible for self-regulation, public education, and personnel training.
6. Stablecoin chapter: Stablecoin issuance requires permission and Central Bank consultation; reserve assets must be fully maintained, held by domestic financial institutions, separated from proprietary property, and subject to redemption, disclosure, and reporting rules.
7. Market order and penalties: The act prohibits false statements, fraud, concealment, and manipulation; it also creates criminal liability, administrative penalties, corporate responsibility, and transition rules. Serious fraud or market manipulation can carry up to 10 years of imprisonment and a fine of NT$200 million.

After-Passage Remarks

In remarks after the third-reading vote, Legislator Ko said the act means Taiwan will not be absent from the next era of digital finance. Major markets including the European Union, the United States, Japan, Hong Kong, and Singapore have already built digital-asset supervisory regimes. Taiwan now needs a clear, transparent, and supervisable framework so Bitcoin, stablecoins, RWA, and new financial services can move from risk labels toward responsible governance.

His core position is that anti-fraud policy should not kill innovation, and innovation cannot come at the expense of people’s property safety. After passage, supervisory work turns to customer asset segregation, disclosure, platform listing rules, stablecoin issuance rules, and rolling updates for derivatives and new services. Ko’s office will continue tracking whether the FSC, Central Bank, and related agencies complete delegated regulations so RWA applications can move beyond concepts and connect Taiwan’s industries, financial markets, and international capital.

June 3 Attendance

The Finance Committee’s 16th full committee meeting was held in Red House Room 202. The June 3 attendance list included FSC Chair Peng Jin-long and officials from the FSC’s Financial Market Development and Innovation Department, Legal Affairs Department, Banking Bureau, Securities and Futures Bureau, and Examination Bureau, as well as the Central Bank, Ministry of Finance, Ministry of Justice, Judicial Yuan, Directorate-General of Personnel Administration, and the Criminal Investigation Bureau. This shows the bill was no longer only a financial supervisory issue; it also involved foreign exchange, taxation, judicial process, criminal investigation, staffing, and administrative implementation.

Attached Resolutions and Implementation Tasks

The Finance Committee review outcome lists 15 attached resolutions. They do not merely ask the competent authority to study issues after passage; several set trackable delegated-regulation and policy tasks:

1. Derivatives and new services: The FSC is asked to present a plan or draft rules for derivative virtual asset product services within one year after passage or implementation, publish them for comment, and review market development and compliance every six months.
2. Overseas platforms and local presence: The FSC should strengthen management of unapproved overseas platforms with reference to international practice. Overseas VASPs seeking Taiwan branches should comply with AML, counter-terrorist-financing, and anti-fraud rules, and guide existing Taiwan customers to local compliant entities.
3. Financial consumer protection: When the act takes effect, the FSC is asked to designate VASPs as financial service providers under the Financial Consumer Protection Act, with duties including know your customer, suitability assessment, risk disclosure, truthful advertising, and anti-fraud controls.
4. Delegated regulations and supervisory capacity: Before issuing delegated regulations, the competent authority should actively consult the industry association, market participants, and experts. It should also keep reviewing dedicated supervisory staffing and seek support from the Directorate-General of Personnel Administration where needed.
5. Industry transition and personnel qualifications: Existing workers moving from the AML registration regime to the new licensing regime should have a reasonable period to obtain the qualifications required under the act. The attached resolution suggests at least one year, with a possible six-month extension when necessary.
6. Stablecoins and other financial laws: The FSC is asked to study the boundary between this act and the Securities and Exchange Act or Futures Trading Act for stablecoins that are licensed or recognized, fully reserved, redeemable at a fixed one-to-one face value, and used mainly for payment or settlement.
7. In-kind victim restitution: The FSC should work with the Ministry of Justice and related agencies to review seizure, custody, preservation, conversion, and restitution rules for virtual assets, and study a mechanism that preserves and returns virtual assets in their original form as the default.
8. Transaction restrictions and listing procedures: Within one year after implementation, the FSC is asked to complete draft rules for customer transaction restrictions, including triggers, duration, records, complaints, and remedies. Listing-filing rules should also set a clear review deadline, with 15 days as the baseline principle.

Timeline

Next Steps After Passage

After third-reading passage, the work shifts to implementation. Legislator Ko’s office will continue tracking whether the FSC, Central Bank, and related agencies complete delegated regulations, licensing review, stablecoin rules, overseas-platform management, customer-rights safeguards, derivative product rules, and RWA application pathways in line with the committee consensus. This includes derivative product rules, transaction-restriction procedures, listing-filing deadlines, financial consumer protection coverage, personnel qualification transitions, and rules for seized-asset custody and restitution, so the system protects people against fraud while preserving room for financial innovation.