Langgampos.com - Taiwan’s financial regulators are preparing to introduce a new draft law concerning Virtual Asset Service Providers (VASPs) in June. A key proposal within this draft is granting banks the authority to issue stablecoins.
According to *bitcoin.com* on Saturday, January 24, 2025, the Chairman of Taiwan’s Financial Supervisory Commission (FSC), Peng Jinlong, stated that passing this law will encourage Taiwanese investors to participate in the virtual asset market.
Reports indicate that Zhuang Xiuyuan, an official from an unnamed bank, revealed that every stablecoin issued in Taiwan will require approval from the FSC.
Revamping Stablecoin Reserve Endorsement
Xiuyuan further explained that the new system will change how stablecoin reserves are endorsed. Currently, issuers conduct the endorsement independently, but under the new regulation, the process will involve regulators to ensure issuers meet proper standards.
Jinlong also mentioned that stablecoin management will be jointly handled by Taiwan’s commercial banks and central bank. Taiwan’s announcement of a regulatory framework for VASPs, including rules for bank-issued stablecoins, comes as the United States intensifies its efforts to regulate stablecoins.
Crypto Custody Services
Previously, the FSC planned to launch a trial for crypto custody services in the first quarter of 2025, according to a report by the local *Central News Agency*. This initiative aims to promote institutional adoption of cryptocurrencies, with three private banks already expressing interest in participating.
The FSC has specified that institutions applying for the trial must identify the types of assets they intend to store, including Bitcoin, Ether, and Dogecoin. Applicants will also need to clarify their target user demographics, distinguishing between professional and general investors as well as crypto asset platforms.
Updated Anti-Money Laundering Rules
Hu Zehua, Director of the FSC’s Comprehensive Planning Division, indicated that detailed information about the trial will be released at least 15 days before the application process begins. Additionally, the FSC will seek public feedback to refine the trial framework.
As part of its crypto regulatory efforts, the FSC has updated Taiwan’s Anti-Money Laundering (AML) rules. These updates require all crypto-related companies to register with the government by September 2025. Non-compliance could result in severe penalties, including fines of up to USD 156,000 or imprisonment for up to two years.
Taiwan’s crypto-friendly approach starkly contrasts with mainland China, which imposed a sweeping crackdown on crypto transactions in 2021.
Legal experts from Regulated United Europe note that while Taiwan does not recognize cryptocurrencies as legal tender, the government permits and regulates investments in the digital asset sector.
The World Blockchain Summit has identified Taiwan as the next key crypto market, despite the absence of specific legislation for cryptocurrencies. (*)
Taiwan’s crypto-friendly approach starkly contrasts with mainland China, which imposed a sweeping crackdown on crypto transactions in 2021.
Legal experts from Regulated United Europe note that while Taiwan does not recognize cryptocurrencies as legal tender, the government permits and regulates investments in the digital asset sector.
The World Blockchain Summit has identified Taiwan as the next key crypto market, despite the absence of specific legislation for cryptocurrencies. (*)
