Are there as many as five versions of the draft Virtual Asset Service Act? Financial Supervisory Commission: Stablecoin reserves and interest regulations are the key points

Author: Max, Crypto City

Financial Supervisory Commission promotes licensing transformation, establishing a comprehensive VASP regulatory framework
Chairman Peng Jinlong of the Financial Supervisory Commission (FSC) delivered a special report on “Development and Outlook of Financial Technology Business Promotion” to the Legislative Yuan Finance Committee on May 7. The report pointed out that as emerging technologies rapidly evolve, fintech has become a key to enhancing industry competitiveness. The FSC’s current policy focus is on implementing financial and business supervision of Virtual Asset Service Providers (VASP).
According to the draft Virtual Asset Service Law approved by the Executive Yuan in April 2025 and submitted to the Legislative Yuan, Taiwan’s virtual asset regulation is entering a milestone transformation, officially shifting from the previous “Anti-Money Laundering Registration System” to a stricter “Licensing System.”

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This system transition includes clear transitional regulations. Businesses that have completed AML registration before the new law takes effect must apply for a license within nine months after the law’s implementation and obtain the license within 18 months. If the deadline is missed, they will no longer be allowed to operate related businesses. （The draft version proposed by the Democratic Progressive Party and Lin Siming suggests obtaining a license within 15 months.)
The FSC emphasizes that this adjustment is essentially to establish a regular communication mechanism between the financial industry and VASP operators, ensuring that virtual assets can develop innovatively while managing risks and protecting consumer rights.
Peng Jinlong stated that the FSC is actively creating a friendly development environment and will further enhance Taiwan’s financial market innovation through public-private collaboration.

Legislative race under bipartisan consensus, analysis of four major draft versions
Currently, in addition to the Executive Yuan version, the Legislative Yuan has four other draft bills proposed by different party caucuses and members, demonstrating a high level of bipartisan consensus on establishing industry standards. Members from the Taiwan People’s Party caucus, DPP legislator Lin Chuyin, KMT legislators Lin Siming and Ge Rujun have each drafted versions of the “Virtual Asset Service Law.”

Image source: Legislative Yuan Finance Committee | Besides the Executive Yuan version, there are four other draft bills proposed by different party caucuses and members

The Taiwan People’s Party version emphasizes that the virtual asset market valuation approached $2.5 trillion in January 2022. Despite major shocks like the Terra Luna collapse and FTX bankruptcy, the market size remained above $1 trillion. Therefore, establishing a comprehensive regulatory system to protect traders’ rights is urgent.
The versions proposed by Ge Rujun, Lin Chuyin, and others widely reference international legislative trends from the EU (MiCA), Japan, South Korea, and Hong Kong, regulating the diverse nature of virtual assets. Ge Rujun’s version particularly focuses on the impact of virtual assets on traditional finance and the real economy, including cross-border payments, financing, and supply chain finance applications.
Regarding administrative sanctions, all versions propose strict penalties, with violations of mandatory or prohibited regulations punishable by fines up to NT$6 million, with the possibility of ordered rectification within a deadline. Failure to comply may result in repeated penalties. This rigorous legal design aims to boost public trust in the virtual asset market and ensure the rule of law and financial stability.

Stablecoin regulation chapter becomes a highlight, with strict reserve and interest rules
In the draft law, “Stablecoin Issuance and Management” is listed as a separate chapter, reflecting the authorities’ high concern about the risks of such assets. The FSC clearly stipulates that issuing stablecoins within Taiwan must be approved by the authorities. Issuers are required to maintain sufficient reserve assets and issue and redeem at face value. To prevent stablecoins from being mistaken for traditional bank deposits and to avoid speculation risks, the draft states that stablecoin issuers cannot pay interest to holders. Additionally, operators must establish strict internal controls, audits, and cybersecurity management systems, and regularly report and disclose relevant financial and business information to ensure transparency.
Regarding reserve requirements for stablecoin issuance, the draft introduces a strong deterrent mechanism. If issuers fail to deposit sufficient reserves, the central bank will charge interest on the shortfall at 5% annual rate based on the minimum refinancing rate announced. For serious violations, administrative fines ranging from NT$300k to NT$6 million may be imposed. This regulatory framework, combining financial stability and cybersecurity resilience, aims to ensure the steady development of stablecoins in Taiwan. The FSC also states that after the law is enacted, relevant delegated regulations will be drafted to officially open applications for stablecoin issuance.

Asset tokenization and AI leading the future, continuous fintech innovation
In addition to legal frameworks, the FSC is actively promoting asset tokenization (RWA) experiments, focusing on bonds and gold as initial targets. By transforming physical assets into digital certificates via blockchain technology, liquidity can be improved, and transaction and settlement complexities reduced.
Furthermore, the FSC is actively promoting the “Hidden Light Plan,” launched in March 2025, which has visited 15 financial and tech startups to help clarify regulatory challenges in innovation experiments and business pilots, and to identify promising innovative projects. This plan complements the 2025 “Inclusive Finance” proposal competition, jointly promoting digital financial innovation.
In terms of technological applications, the FSC is also focusing on the development of agent-based AI and programmable AI. To guide financial institutions in properly applying AI, the FSC is promoting the “Programmable AI Governance Project,” studying domestic and international regulations, identifying financial application scenarios, and establishing quantifiable risk assessment indicators.

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The report concludes by mentioning that the “2025 Taipei FinTech Forum” held in October 2025 attracted participants from 8 countries and over 30 experts, with nearly 1,000 attendees in person. Through international exchanges and technological integration, Taiwan is striving to build a digital financial ecosystem that combines innovative momentum with security resilience in the global fintech wave.