Taiwan Approves First Crypto Law on June 30, Imposes Up to 7 Years Prison for Unlicensed Providers

According to reports, Taiwan's Legislature approved the Virtual Asset Service Act on June 30, establishing the country's first dedicated cryptocurrency law and designating the Financial Supervisory Commission (FSC) as the sole regulator. The 56-article statute replaces a registration system with mandatory licensing for all virtual asset service providers, including exchanges, custodians, and wallet operators. Violations—including operating an unlicensed virtual asset service provider or issuing unauthorized stablecoins—carry penalties of up to seven years in prison and fines of up to $3.1 million.

The law requires service providers to obtain FSC approval and maintain separate licenses across seven categories. Stablecoin issuance is limited to domestic banks, with tokens pegged solely to fiat currencies and held in one-to-one reserves in trust with domestic financial institutions. Foreign-issued stablecoins such as USDT and USDC will be treated as regulated commodities. The FSC must draft roughly nine pieces of secondary legislation to fully implement the rules by early 2027.