Taiwan’s crypto regulatory regime has moved into the rulemaking phase. Financial Supervisory Commission Chairman Peng Jin-lung said the FSC is drafting nine authorized by-laws after the Virtual Asset Service Act completed the legislative process, including rules for stablecoins, one of the market’s main points of focus. The parent law and the related by-laws could be officially promulgated and implemented as early as the first quarter of 2027.
Speaking on Sept. 2 at FinTechOn 2026 and the Asian FinTech Alliance Summit, Peng said global discussion around virtual assets and stablecoins has shifted from whether they should be developed to how they should be developed and supervised in a sound manner. He said the FSC wants to promote traditional finance, digital finance, and blockchain finance on a parallel track while keeping risks under control.
The law has been promulgated, but implementation still depends on supporting rules
The Virtual Asset Service Act passed its third reading in the Legislative Yuan on June 30 and was promulgated by the president on July 22, becoming Taiwan’s first dedicated law that comprehensively regulates virtual asset service providers.
The new law expands oversight beyond the current anti-money laundering-centered framework to cover business operations, customer asset protection, information security, market order, and stablecoin issuance. But promulgation does not mean all provisions take effect immediately. The FSC plans to put the parent law and the by-laws into force at the same time after the authorized rules are completed. The target is as early as the first quarter of 2027, though the actual date will still need to be announced separately by the Executive Yuan.
Nine by-laws will cover VASP setup, controls, and unusual transaction management
According to the FSC’s plan, the nine by-laws will cover standards for setting up virtual asset service providers, qualifications for responsible persons and business personnel, financial and business management, internal control systems, outsourcing of operations, and management of virtual asset accounts as well as suspected illegal or clearly abnormal transactions.
The remaining rules will address supervision of the VASP industry association, preparation and filing of financial reports, and permits and management for stablecoin issuance. Those by-laws will determine the capital thresholds, organizational requirements, staffing, information security, internal controls, and asset management obligations that firms must meet when applying for licenses. They are also central to whether the new regime can be put into practice.
The parent law classifies VASP business into seven categories: exchange providers, trading platform providers, transfer providers, custody providers, underwriters, lending providers, and other service providers. Firms will have to obtain FSC approval and licenses based on the business lines they operate. They will no longer be able to offer services solely on the basis of the current anti-money laundering registration.
Domestic stablecoin issuance will require approval from both the central bank and the FSC
Stablecoins are one of the main focal points in the by-law drafting process. Under the Virtual Asset Service Act, any firm that wants to issue a stablecoin in Taiwan must first obtain consent from the central bank and then secure approval from the FSC.
Issuers must also maintain full reserve assets and place those reserves in trust, while undergoing periodic reviews and meeting information disclosure obligations. The follow-up by-laws will further define issuer qualifications, application procedures, capital requirements, the types of stablecoins that may be issued, use cases, reserve asset management, and issuance and redemption procedures.
That means the law taking effect will not allow market participants to immediately issue a "New Taiwan dollar stablecoin." Firms will still need to wait for the by-laws to be released, complete the review procedures of the central bank and the FSC, and obtain approval before any issuance can begin.
Existing dollar stablecoins such as USDT and USDC are issued offshore. They are not issued domestically under approval granted through Taiwan’s Virtual Asset Service Act. The FSC previously said offshore stablecoins still count as virtual assets. If Taiwan VASPs want to provide trading services tied to them, the listings must go through the virtual asset review mechanism, be reviewed by the industry association, and then be submitted to the FSC for recordation.
Central Bank Governor Yang Chin-long also said that supervision is relatively more direct when a New Taiwan dollar stablecoin is issued by a domestic institution. Dollar-denominated and other foreign-currency stablecoins, by contrast, involve foreign exchange fund flows. Preliminary planning may follow an FX management model similar to the one used for designated banks, along with a reporting mechanism for stablecoin transfer data.
Existing VASPs may have roughly two years to complete relicensing
After the new law takes effect, existing VASPs will move from an anti-money laundering registration system to a business licensing system. Firms that completed AML registration before the law’s implementation, as well as financial institutions that provide related services under FSC rules, must submit license applications within 12 months after the law takes effect.
They must obtain FSC approval and licenses within 21 months after implementation, with extensions available when necessary in increments of three months each. In practical terms, existing operators may have roughly two years to complete the transition, though they will need to invest during that period in capital, internal controls, information security, financial reporting, and customer asset protection.
The law also allows banks and other financial institutions to apply to concurrently operate VASP businesses. That means virtual asset custody, trading, stablecoins, and real-world asset tokenization may not be limited to crypto-native firms in the future. Traditional financial institutions could also enter the market once approved.
Derivatives are not part of the first core package of nine by-laws
Products closely watched by the market, including perpetual contracts, dual-currency structured products, and other virtual asset derivatives, will not be fully opened as soon as the nine by-laws take effect. The Legislative Yuan has required the FSC to submit relevant planning within one year after the special law is implemented. The competent authority had previously estimated that a policy plan could be completed as early as the first quarter of 2028.
The nine by-laws will shape how Taiwan’s virtual asset law moves from a legal framework to day-to-day market operation. For industry participants, the issue is not only whether they can secure a license. It also includes ongoing compliance costs tied to capital thresholds, segregation of customer assets, wallet and information security management, monitoring of unusual transactions, and financial disclosure.
For stablecoins, what is clear at this stage is that issuance will be subject to dual oversight by the central bank and the FSC, under a full-reserve and trust custody framework. Which institutions may receive approval first, whether New Taiwan dollar or foreign-currency stablecoins may be issued, and which payment or cross-border use cases will be allowed are still matters that await the formal release of the by-laws.