Taiwan Passes First Crypto Licensing Law, Ending AML-Only Regime

• Taiwan’s Virtual Asset Service Act replaces AML-only registration with full licensing.
• FSC will oversee licensing, supervision, and enforcement for crypto firms.
• Stablecoin issuers now require FSC approval before issuing tokens in Taiwan.

Taiwan’s legislature on July 1 passed the Virtual Asset Service Act (VASA), introducing a full licensing regime for crypto firms and stablecoin issuers and replacing the country’s previous AML-only registration framework. 

The law requires all virtual asset service providers (VASP) to obtain approval from the Financial Supervisory Commission (FSC) to operate. The move brings Taiwan in line with a broader global shift toward stricter crypto licensing regimes.

Licensing Replaces AML Registration

The new law replaces Taiwan’s 2024 AML registration regime with a mandatory licensing system covering operational, governance, and custody requirements.

Sponsored

Crypto Prediction Markets

18+ · Gambling involves risk. Play responsibly.

Crypto firms must instead obtain a full operating license from the FSC and comply with a wider set of prudential requirements. 

Firms that have already completed AML registration will be given a 12-month window to apply for a full license and a total of 21 months to obtain formal approval from the Financial Supervisory Commission (FSC).

Stricter Requirements for Crypto Firms

Licensed firms will be required to segregate customer assets from corporate funds, meet cybersecurity standards, and implement formal governance and risk management systems, according to the law.

The framework also mandates internal controls and compliance structures aligned with financial-sector standards.

Stablecoin issuance will now fall under direct regulatory approval, requiring prior authorization from the FSC before any token can be issued in Taiwan. The change places stablecoins under financial supervision rather than treating them solely as digital assets, aligning them more closely with payment instruments.

Part of a Broader Regulatory Trend

The move aligns Taiwan with a broader tightening of global crypto regulation, including the European Union’s Markets in Crypto-Assets (MiCA) framework and ongoing US efforts to establish federal market structure rules for digital assets.

Why This Matters

Taiwan’s new crypto licensing framework is expected to raise compliance costs for crypto exchanges operating in Taiwan while potentially accelerating consolidation among smaller providers unable to meet licensing and custody requirements.

It also positions Taiwan as a regulated entry point into Asian digital asset markets, particularly for firms seeking jurisdictional clarity.

Dive into DailyCoin’s popular crypto news right now:
TradFi Perps Hit $1.3T as Crypto Traders Abandon Spot Markets
Strategy Authorizes $1.25B Bitcoin Sales