On May 7, Financial Supervisory Commission (FSC) Chairman Peng Jin-long presented a special report to the Finance Committee of the Legislative Yuan on the promotion and outlook of fintech development. Based on the draft "Virtual Asset Service Act" approved by the Executive Yuan in April 2025 and submitted to the Legislative Yuan, Taiwan's virtual asset regulation is undergoing a landmark shift from a simple anti-money laundering registration system to a more stringent licensing regime.
FSC Pushes Licensing Transition to Build Comprehensive VASP Supervision
The new law includes clear transitional provisions. VASPs that have completed anti-money laundering registration before the new law takes effect must apply for a license within 9 months after enactment and obtain the license within 18 months. If they fail to complete the conversion by the deadline, they will not be allowed to continue operating. (The draft versions from the Taiwan People's Party and legislator Lin Si-ming propose a tighter 15-month deadline for obtaining licenses.) The FSC emphasizes that this transition aims to establish a regular communication mechanism between the financial industry and VASPs, ensuring that innovation in virtual assets balances risk control and consumer protection.
Legislative Race Under Cross-Party Consensus: Analysis of Four Draft Versions
In addition to the Executive Yuan version, four other specialized draft bills have been proposed by different caucuses and legislators: the Taiwan People's Party caucus, DPP legislator Lin Chu-yin, KMT legislators Lin Si-ming and Ge Ru-jun. The TPP version highlights that the virtual asset market valuation once approached US$2.5 trillion in January 2022, and despite major shocks such as the Terra LUNA collapse and FTX bankruptcy, the market still exceeds US$1 trillion. Establishing a comprehensive regulatory system to protect traders is therefore urgent. The drafts by Ge Ru-jun and Lin Chu-yin extensively reference international legislative trends such as the EU's MiCA, Japan, South Korea, and Hong Kong, targeting the diverse nature of virtual assets. Regarding administrative penalties, all versions propose severe fines: up to NT$6 million for violations of mandatory or prohibitive provisions, with orders to rectify within a specified period, and successive fines for non-compliance.
Stablecoin Regulation Chapter Stands Out: Strict Reserve and Interest Rules
In the draft bills, "Stablecoin Issuance and Management" is designated as an independent chapter, reflecting the authority's high concern for the risks of these assets. VASPs must establish strict internal controls, internal audit, and information security management systems, and regularly report and disclose financial and business information to ensure transparency. For stablecoin issuance, the bills design a powerful deterrent mechanism regarding reserve requirements. This regulatory framework combines financial stability with cybersecurity resilience, aiming for the sound development of stablecoins in Taiwan. The FSC also stated that after the specialized law completes the legislative process, it will further draft related authorization regulations to formally allow VASPs to apply for issuing stablecoins.
Asset Tokenization and AI Lead the Future: Fintech Innovation Never Stops
Beyond legal framework construction, the FSC is simultaneously advancing real-world asset tokenization (RWA) experiments, focusing on bonds and gold as pilot assets. By using blockchain technology to convert physical assets into digital certificates, the initiative can enhance asset liquidity and reduce transaction and settlement complexity. This program complements the 2025 "Financial Inclusion" proposal competition, jointly promoting digital financial innovation. On the technology application front, the FSC is eyeing the development of agentic AI and programmable AI. To guide financial institutions in appropriately applying AI, the FSC is promoting the "Programmable AI Governance Project," studying domestic and international regulations and inventorying financial application scenarios to develop quantifiable risk assessment indicators. The report concludes by noting that the "2025 Taipei Fintech Forum" held in October 2025 attracted over 30 experts from 8 countries and nearly 1,000 on-site participants. Through international exchanges and technology integration, Taiwan aims to build a digital financial ecosystem that combines innovative momentum with safety and resilience amidst the global fintech wave.