Taiwan’s Legislative Yuan passed the Virtual Asset Service Law on its third reading on June 30, moving oversight of cryptocurrencies beyond narrow anti-money laundering rules.
The law rewrites how virtual asset service providers (VASPs) and stablecoin issuers operate, introducing licensing requirements, reserve rules, and criminal penalties.
Taiwanese legislators corridor Comprehensive Cryptocurrency Regulation Act
The Financial Supervision Commission (FSC) said the framework Lifts supervision Virtual Asset Service Providers (VASPs) from a money laundering focus to full operational standards and market behaviour.
The law defines seven VASP categories, including:
- Exchange virtual assets
- Trading platform operators
- Transfer service providers
- Guardians
- Guarantors
- Lending service providers
- Other virtual asset service providers
The law requires virtual asset service providers to segregate client assets and comply with internal oversight, cybersecurity, and auditing Financial reporting requirements.
The law grants a transition period to existing virtual asset service providers that have completed anti-money laundering (AML) registration before the law comes into force, as well as financial institutions that already provide virtual asset services under FSC regulations.
These entities must apply for an FSC license within 12 months of the implementation of the law. They must also obtain regulatory approval and an operating license within 21 months. If necessary, the licensing deadline may be extended once for up to an additional three months.
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At the same time, the law also sets regulatory requirements for issuing stablecoins. Entities seeking to issue stablecoins in Taiwan are required to obtain approval from the Central Bank of the Republic of China (Taiwan) and authorization from the Financial Services Commission (FSC).
Furthermore, exporters must maintain full reserve support For all stablecoins issued, Place reserve assets in trust, undergo regular audits, and comply with periodic information disclosure requirements.
“At the same time, issuing stablecoins within the ROC will help Taiwan comply with international standards and secure a place in the global virtual assets market, which will greatly benefit the long-term sound development of Taiwan’s virtual assets market,” the press release said. He said.
Penalties escalate sharply for misconduct. Fraud or price manipulation It carries a prison sentence of 3 to 10 years, as well as fines ranging from NT$10 million to NT$200 million ($314,000 to US$6.3 million).
The Executive Yuan will determine the date on which the legislation will enter into force.
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this post Taiwan is developing cryptocurrency regulation with new VASP and Stablecoin framework appeared first on BeInCrypto.
