Aprovada na terceira leitura em junho mais rápido! Lei de Serviços de Ativos Virtuais passa na revisão inicial, pontos principais da versão preliminar e cronograma de implementação de uma só vez

Taiwan's first dedicated crypto law, the "Virtual Asset Service Act," has passed the initial review in the Legislative Yuan, bringing the industry under a licensing system. The bill covers stablecoin management and derivative planning, with a potential third reading as early as June this year. When is it expected to fully come into effect?

Taiwan's first dedicated crypto law! Draft of the Virtual Asset Service Act passes initial review

The Legislative Yuan's Finance Committee yesterday (6/3) conducted a line-by-line review of the draft of the "Virtual Asset Service Act," successfully completing the initial review after a full day of discussion. This is also Taiwan's first-ever dedicated crypto legislation in history.

This review gathered 12 versions proposed by the Executive Yuan, the Democratic Progressive Party caucus, and cross-party legislators, reaching consensus within the committee. Financial Supervisory Commission Chair Peng Jinlong revealed that future regulations will be designed with differentiated supervisory frameworks and capital requirements based on the risk level of different businesses, balancing financial security and industry innovation.

Five core points of the initial review version of the Virtual Asset Service Act

Based on reports from the Industrial and Commercial Times, Economic Daily News, and Central News Agency, the draft approved in the initial review will elevate the virtual asset industry from the current anti-money laundering registration system to a licensing system for permitted businesses.

Below is a summary of the main points of the initial review version (scrollable table for mobile reading):

| Category | Key Points of the Initial Review of the Virtual Asset Service Act | | --- | --- | | Licenses and Business | Regulates virtual asset service providers (VASP) to apply to the Financial Supervisory Commission within 12 months after the law takes effect, and obtain permits within 21 months, with a maximum 2-year transition period for the 8 existing registered operators. Business scope includes exchanges, trading platforms, transfers, custody, underwriting, and lending services. | | Stablecoin Issuance | Stablecoin issuers must apply for permission from the FSC and consult with the Central Bank. Issuers must set aside and maintain fully backed reserve assets, stored with domestic financial institutions and independent of their own assets, all held in trust. Additionally, stablecoin issuers are not allowed to pay any form of interest or yield. | | Derivative Planning | The Finance Committee passed a resolution requiring the FSC to complete service planning for virtual asset derivatives (such as options, dual-currency wealth management, etc.) within 1 year after the law's passage and to draft relevant制度 proposals. | | Product Listing and Delisting | Future management of trading platforms will adopt a filing system. Virtual asset service providers must complete product listing and delisting reviews themselves before applying for filing with the FSC, a mechanism that offers more supervisory flexibility and market efficiency compared to case-by-case review. | | Nine Sub-laws | After the main law passes, subsequent supervisory details will be supplemented by nine sub-laws, covering capital requirements, operational guarantees, personnel qualifications, restrictions on offshore platforms, and management regulations for various businesses. |

Virtual Asset Service Law passes initial review, cross-party legislators and FSC opinions

Regarding the advancement of the "Virtual Asset Service Law" draft, both cross-party legislators and the FSC Chair have expressed their views, summarized as follows:

• Legislator Li Yanshou: Estimates that the bill may complete second and third readings by June, laying a regulatory foundation for fintech innovation and effectively safeguarding traders' rights.
• Legislator Ge Rujun: Thanks cross-party members for their support, allowing the provisions to reach consensus without negotiation, and hopes Taiwan can become a global digital financial center through its pioneering efforts.
• Legislator Lin Siming: Cites IMF statistics indicating the global virtual asset market is approaching 3.5 trillion USD. He advocates that if financial institutions engage in related businesses in the future, they should be subject to the same supervisory standards, and establish abnormal price-volume monitoring and unfair trading detection systems.
• Legislator Lai Huiyuan: Focuses on transparency and risk control, demanding that authorities regularly disclose and update the list of compliant service providers and trading statistics in real-time. Also suggests tiered management based on business scale and grants authorities the power to intervene and restrict operations in case of abnormal business activities.
• FSC Chair Peng Jinlong: Responds to concerns about personnel qualification impacts, stating that qualification criteria will be set in sub-laws, with at least a 1-year adjustment period for personnel, extendable by 6 months if necessary, to help the industry smoothly transition to the new system.

Source: Li Yanshou's Facebook page　Virtual Asset Service Law passes initial review, cross-party legislators and FSC comment

If the Virtual Asset Service Law is passed, when will it fully come into effect in 2027?

According to legislative procedures in the Legislative Yuan, generally, after a bill completes its initial review and if it is decided not to submit it for caucus negotiations, it will be directly sent to the plenary session for second and third readings.

During the second reading, broad discussions and line-by-line reviews will be conducted. After the second reading, the bill will, in principle, proceed to the third reading at the next session, where amendments are made and the entire bill is voted on. Once the third reading passes, the law will be promulgated by the President, who should do so within 10 days of receipt.

Source: Taiwan Legislative Yuan legislative process

If the "Virtual Asset Service Law" passes the third reading smoothly and is promulgated by the President, based on the provisions of the initial review, the FSC must submit a derivative product planning proposal within 1 year, and the related nine sub-laws, such as the soon-to-be-released banking custody guidelines for cryptocurrencies by late September to early October and personnel qualification sub-laws, will be drafted accordingly.

Therefore, the comprehensive licensing and supervision system, including sub-laws, is expected to be fully implemented within 1 to 2 years after the law's promulgation, most likely in the first half of 2027, and possibly as late as 2028, as industry license application periods expire and full implementation occurs.

Further reading:
Make Taiwan a digital asset hub! Legislator proposes VASP tax incentives and domestic Bitcoin ETF issuance

Economic Daily News points out "these 6 banks" may pioneer stablecoins! What are Taiwan's stablecoin business opportunities?

Taiwan's crypto scene welcomes a new chapter! OneCard connects with virtual assets, Federal Bank: future investment trusts may issue crypto ETFs