Taiwan is moving closer to a full legal framework for crypto. Financial Supervisory Commission Chairman Peng Chin-lung told the legislature’s finance committee on March 23 that the draft Virtual Asset Service Act has completed Cabinet review, has been listed as a priority bill, and is expected to be sent to the legislature during the current session. A separate but closely watched item is also on the clock: formal guidelines for virtual asset custody are due within six months.
19 banks interested, 5 already in pilot programs
The banking side is already preparing. Peng said 19 banks have expressed interest in virtual asset custody services, with 5 banks currently in pilot programs. Different institutions are using different technical approaches, and the regulator is trying to consolidate those efforts into a more efficient framework before formal rollout.
Peng said banks carry a higher level of public trust and can offer stronger protection for holders if they enter the custody business. Banking Bureau Director-General Tung Cheng-chang added that the pilot period is set at one year, with reference to Hong Kong’s guidance. At this stage, the range of assets that can be accepted for custody is limited, and Bitcoin is the main focus.
Accounting guidance is expected between late March and April
Regulators are also working on accounting treatment for the sector. Securities and Futures Bureau Director-General Kao Ching-ping said the accounting industry has commissioned research on how virtual asset businesses should record holdings and related items. The resulting guidance is expected between late March and April, aiming to address current gray areas in accounting practice.
On the legislative side, the draft law includes a clause covering “other virtual asset businesses approved by the competent authority.” That provision would leave room for regulatory adjustments as the sector changes, allowing authorities to respond without rewriting the law each time new business models appear.
More than 30 offshore platforms remain outside the current framework
Lawmaker Lin Dai-hua said during questioning that only 8 VASPs have completed anti-money laundering registration, while more than 30 offshore platforms are active in Taiwan and remain outside the regulated perimeter.
Peng replied that virtual asset services had long operated in a lightly regulated environment around the world, and that the new law is meant to create a comprehensive supervisory system. For offshore exchanges, he laid out only two legal paths to operate in Taiwan: set up a local branch or establish a new entity under the requirements of the special law. He also said several offshore exchanges have already asked about setting up branches. Platforms that solicit business in Taiwan without a local presence would be in violation.
The 8 registered operators are already complying with anti-money laundering obligations, including the Travel Rule.
Derivatives remain off the table for now
The FSC also took a cautious line on virtual asset derivatives. Peng said crypto products are already difficult for many people to understand, and opening access directly to more volatile derivative products would not be appropriate at this stage. Any discussion of timing, he said, would come only after operators show adequate capability and full risk controls.