Recently, Taiwan has been accelerating its actions in virtual asset regulation. The Financial Supervisory Commission Chairman Peng Jinlong reported to the Legislative Yuan Finance Committee that the regulatory framework for Virtual Asset Service Providers (VASPs) has already taken shape, which is an important milestone for the entire industry.

Interestingly, not only the Executive Yuan has a version, but currently there are five different draft versions of the "Virtual Asset Service Law" being promoted within the Legislative Yuan. Members from the Taiwan People's Party, DPP legislator Lin Chuyin, KMT legislators Lin Siming and Ge Rujun have each proposed their own versions of the special law, indicating a consensus across party lines on establishing regulations for the virtual asset industry.

The Taiwan People's Party version particularly emphasizes the importance of market size. Although the virtual asset market surged to $2.5 trillion in January 2022, it later suffered setbacks from the Terra Luna collapse and FTX bankruptcy, but the market size still remains above $1 trillion. Therefore, a comprehensive regulatory system is urgently needed. The versions proposed by Ge Rujun and Lin Chuyin extensively reference practices from the EU, Japan, South Korea, and Hong Kong, with a special focus on the impact of virtual assets on traditional finance.

The arrangements for the transition period are also quite practical. Businesses that have already completed anti-money laundering registration are required to apply for permits within nine months after the new law takes effect, and obtain licenses within 18 months. The Taiwan People's Party version suggests adjusting this to 15 months, but the basic logic remains the same.

What caught my attention the most is the dedicated chapter on stablecoin regulation. Issuance of stablecoins in Taiwan must be approved, and sufficient reserve assets must be maintained. Notably, issuers are not allowed to pay interest to holders, to prevent stablecoins from being mistaken for bank deposits. The reserve requirements are also quite strict; if reserves are insufficient, the central bank will impose an annual interest rate of 5% on the minimum refinancing rate, and in serious cases, fines ranging from NT$300k to NT$6 million. All versions set heavy penalties for violations, with a maximum fine of NT$6 million. This regulatory design aims to enhance public trust in the virtual asset market.

In addition to the legal framework, the FSC is also promoting experiments in asset tokenization (RWA), starting with bonds and gold. There is also a project called "Hidden Light Search Plan," which has visited 15 financial and innovative tech companies since March 2025, helping to clarify regulatory issues during the innovation process.

AI governance is also advancing. The FSC is promoting the "Programmable AI Governance Project," researching domestic and international regulations, and establishing quantifiable risk assessment indicators to guide financial institutions in appropriately applying AI. The "2025 Taipei FinTech Forum" held last October attracted over 30 experts from 8 countries, with nearly 1,000 participants in person.

It seems Taiwan is building a digital financial ecosystem that combines innovative momentum with safety and resilience. The development framework for the virtual asset industry is gradually maturing.