Taiwan Finalizes Nine Virtual Asset Regulations, Including Stablecoin Rules

Taiwan's Financial Supervisory Commission (FSC) is finalizing nine regulations for virtual assets, including stablecoins. The Chairman of the FSC, Peng Chin-long, stated that the regulatory framework has entered the stage of drafting subsidiary regulations. The FSC aims to promote the parallel development of traditional finance, digital finance, and blockchain finance under controllable risks.

The 'Virtual Asset Service Act' was passed by the Legislative Yuan on June 30 and became effective on July 22. However, the promulgation of the law does not mean that all provisions take effect immediately. The FSC plans to synchronize the implementation of the parent law and subsidiary regulations after completing the authorized subsidiary regulations.

The nine authorized subsidiary regulations planned by the FSC cover standards for virtual asset service providers (VASP), qualifications for responsible persons and business personnel, financial and business management, internal control systems, outsourcing of business, and management of virtual asset accounts and suspected illegal or obviously abnormal transactions. The parent law categorizes VASP businesses into seven types: exchanges, trading platforms, transfer agents, custodians, underwriters, lenders, and other service providers.

Stablecoins are a major focus of the subsidiary regulations. According to the 'Virtual Asset Service Act,' any operator wishing to issue stablecoins in Taiwan must first obtain consent from the central bank and then obtain approval from the FSC. Issuers must also maintain sufficient reserve assets and place these assets in trust, while undergoing regular audits and fulfilling information disclosure obligations.

Existing VASP will transition from an anti-money laundering registration system to a business licensing system. Operators who have completed anti-money laundering registration before the law takes effect, as well as financial institutions providing related services according to FSC regulations, must submit their license applications within 12 months after the new law takes effect.