Taiwan's Bitcoin ETF approval or rejection to be announced in June! Legislators worry that high capital requirements for VASPs may cause small players to resist against whales

Financial Supervisory Commission Chair Peng Jinlong pledged to provide an update on the discussion results of the Bitcoin ETF by the end of June, and plans to prioritize opening “bonds” and “gold” for RWA tokenization experiments. The government is committed to completing a dedicated Virtual Assets Act.

Bitcoin ETF review enters deep water—FSC promises to deliver by the end of June

On May 7, 2026, the Legislative Yuan’s Finance Committee convened a meeting and launched intensive questioning on virtual asset regulation and the development of digital finance. Kuomintang legislator Ge Rujun was the first to take the floor, pointing out that global digital assets are accelerating their concentration toward Taiwan, and that the push for Bitcoin ($BTC) ETFs has become an irreversible trend.

Image source: Legislative Yuan Finance Committee—Kuomintang legislator Ge Rujun questions FSC Chair Peng Jinlong on Bitcoin ETF issues

Ge Rujun said that recently, international financial giants such as Morgan Stanley have thrown their hat into the ring in the competition for Bitcoin spot ETFs, showing that traditional finance’s embrace of digital assets is becoming increasingly formalized. He also disclosed that he has submitted to the FSC a research report titled “Bitcoin as Reserve Asset,” drafted by a staff unit of U.S. Senate members. The report details the pros and cons of including Bitcoin in national reserves, as well as legal recommendations.

• Related news: Bitcoin ETF pulls in $100 million in the first week! Morgan Stanley executive: Cryptocurrency has entered the core of the company

In response, FSC Chair Peng Jinlong said he has read the report and understands that it discusses the multiple advantages of viewing Bitcoin as a reserve asset. Regarding the progress of the Bitcoin ETF, which the market is most concerned about, Peng Jinlong said that the securities association’s execution results and analysis reports that are submitted every six months have already been delivered to the FSC, and internal discussions are currently ongoing.

In response to Ge Rujun’s follow-up on whether there is a clear policy timeline for release, Peng Jinlong promised to conduct rolling reviews every six months. He expects that before the end of June 2026, he will explain to the public the feasibility of the Bitcoin ETF and the discussion results.

Ge Rujun emphasized that countries around the world are competing for the role of a digital asset management center. If Taiwan can complete its legal framework earlier, it will help attract global capital to stay in Taiwan and prevent continued outflow of funds that are interested in such products.

RWA tokenization opens a new chapter for asset management—bonds and gold become the first indicators

In addition to ETFs, the tokenization of real-world assets (RWA) became another major focus of the day’s questioning. Legislators from the Democratic Progressive Party, Zhong Jabin and Ge Rujun, both showed strong attention to this.

Ge Rujun cited the latest developments from the Depository Trust & Clearing Corporation (DTCC), saying that the organization has received authorization from the U.S. Securities and Exchange Commission (SEC) and plans to fully tokenize assets with a value as high as $114 trillion. This sweeping move that has shaken global financial markets is viewed as an important milestone in pushing asset values toward digitalization. Zhong Jabin, from the perspective of “century trusts” and “asset inheritance,” asked how the FSC can use asset tokenization to retain Taiwan’s private wealth and attract overseas assets back.

• Related news: 50 financial giants in one place! U.S. DTCC authorized by the SEC to push RWA tokenization worldwide

Peng Jinlong said that the FSC is working to promote an Asia-Pacific asset management hub, and that RWA will be an important application scenario in the future. Currently, the preliminary plan is to take an experimental approach and initially open up “bonds” and “gold” for tokenization. Peng explained that the reason for prioritizing these two assets is that they are relatively easy to value; compared with funds whose account structures are more complex, tokenizing bonds and U.S. Treasuries is less difficult in the early stages.

Zhong Jabin immediately suggested including negotiable instruments and real estate investment trusts (REITs) in the scope of RWA, saying this would help enrich the content of tokenization and could be combined with public infrastructure fundraising. Peng said he is open to the idea, stating that the essence of RWA is that any asset may have the potential to be tokenized. In the future, he will refer to international trends and gradually expand the range of underlying assets, incorporating REITs into the development blueprint.

Image source: Legislative Yuan Finance Committee—Democratic Progressive Party legislator Zhong Jabin immediately suggests including negotiable instruments and real estate investment trusts (REITs) within the scope of RWA

Borrowing the Japan-U.S. stablecoin regulatory framework to promote links between virtual assets and fiat currency

Regarding connecting virtual assets with the real-world financial system, Ge Rujun shared Japan’s successful experience in the digital finance industry. He said that Japan adopts a decentralized regulatory model: experienced financial institutions handle the underwriting and issuance of virtual assets, while trust banks are responsible for holding 1:1 fiat currency reserves to issue stablecoins. These stablecoins are then circulated and traded through regulated Virtual Asset Service Providers (VASPs), ensuring that stablecoins are legally listed and can be settled on the platforms. Ge Rujun believes this win-win model allows traditional banks and startups to share profits, and is an important reference for Taiwan when drafting relevant sub-laws for VASPs.

In addition, Ge Rujun also mentioned progress on the U.S. “CLARITY Act,” especially the controversy over whether stablecoins can generate yield. Based on the direction of the bill, passive fixed interest may be limited; however, if users have specific active activities and the incentives are linked to those activities, there is compliance space.

Peng Jinlong said that the FSC is closely monitoring regulatory developments in other countries, including any new regulations that may be released internationally in June and July.

Regarding the enforcement direction for TWD stablecoins, the FSC plans to strengthen communication with the industry to ensure that, during the drafting of the dedicated act and throughout the enforcement process, promising VASPs are included in the issuance system—bridging the worlds of virtual and real-world currencies, and ensuring Taiwan does not fall behind in international competition.

The draft VASP dedicated act draws attention—how to balance regulatory risk and startup development

Democratic Progressive Party legislator Lin Chuyin focused on the upcoming draft of the “Virtual Asset Service Law.” She said that Taiwan’s local VASP operators have shrunk from a peak of 26 to the current 8, indicating that small and medium-sized startups are gradually exiting the market.

Image source: Legislative Yuan Finance Committee—Democratic Progressive Party legislator Lin Chuyin is concerned that if the future dedicated act sets the capital threshold too high, or if compliance costs increase significantly, the market will see a scenario of “small fry unable to fight big fish”

Lin Chuyin said she is concerned that if the dedicated act in the future sets the capital threshold too high, or if compliance costs rise significantly, the market will end up in a situation where “small fry cannot fight big whales,” leaving only traditional large financial institutions capable of surviving. She cited data showing that in the European Union, the asset requirement for low-risk operators is about NT$1.84 million; in Hong Kong, it ranges from NT$20 million to NT$40 million; and in the U.S., it is about NT$15 million. She urged the FSC that besides regulation, it must also take into account industry diversity.

In response to legislators’ concerns about the survival space for startups, Peng Jinlong explained that the future regulatory framework will follow a risk-based capital (Risk-Based Capital, RBC) approach. He emphasized that capital requirements are intended to protect traders and investors; the higher the risk, the higher the capital defense will naturally be required.

Peng Jinlong pledged that when drafting the enforcement sub-rules, he will reference international standards for actual capital requirements and ensure the rulebook is transparent. He believes market competition is free: capable operators will survive under the rules. The government will not provide targeted protection for specific parties for the long term. The goal is to build a fair and internationally competitive digital finance environment.

At the end, all three legislators urged the FSC that while pursuing rigorous regulation, it should make good use of Taiwan’s strength as a tech powerhouse—so that the virtual asset industry can become a new engine driving Taiwan’s financial progress.

Further reading
Draft Virtual Asset Service Law has up to five versions? FSC report: stablecoin reserves and interest are key