Taiwan enacts sweeping crypto law with licensing and reserve mandates
Taiwan's Legislative Yuan passed the Virtual Asset Service Act, requiring crypto exchanges to obtain FSC licenses and maintain reserve mandates, with penalties for non-compliance.
Taiwan has taken a major step forward in overseeing its digital asset sector by enacting comprehensive new regulations for cryptocurrency operations.
On Tuesday, lawmakers in the Legislative Yuan approved the Virtual Asset Service Act during its third reading, forwarding it to President Lai Ching-te for formal signing, which is anticipated within the next ten days. Once signed, the Executive Yuan will set the official start date for the rules. The legislation requires all virtual asset service providers, including cryptocurrency exchanges and platforms, to secure explicit licensing from the Financial Supervisory Commission (FSC) before they can legally operate in the country. It also introduces reserve mandates and tough penalties for non-compliance, raising the bar for crypto businesses in Taiwan.
For cryptocurrency and digital asset traders, this regulatory clarity is a double-edged sword. On one hand, licensing and reserve requirements may enhance market integrity and investor protection, potentially attracting institutional capital that has been wary of unregulated markets. On the other hand, stricter compliance costs could drive smaller players out of the market, reducing liquidity and choice for retail traders. Live crypto prices and charts on NowPrice show how the market is reacting to this news, with Bitcoin and altcoins experiencing mild volatility as traders assess the implications.
Looking ahead, the focus will be on the implementation timeline and the specific reserve ratios set by the Executive Yuan. Traders should monitor whether other Asian jurisdictions, such as Japan or Singapore, adjust their own regulatory frameworks in response. The law's enforcement against unlicensed operators will also be a key test of Taiwan's commitment to its new regime.