The Financial Supervisory Commission Proposes Draft for the “Virtual Asset Service Act”! Expected to be Submitted to the Executive Yuan by the End of June, with a Dedicated Law for Lending Services
Taiwan’s Virtual Asset Regulation Enters a New Phase
The Financial Supervisory Commission (FSC) of Taiwan recently announced the draft of the “Virtual Asset Service Act,” planning to submit it for review by the Executive Yuan as early as the end of June this year. To gather public opinions and industry voices, the FSC is expected to hold more than 22 public hearings. The new regulations not only relate to market order and investor rights but also serve as a critical turning point for local operators’ future development and international competitiveness.
Draft Enters Final Stage; FSC Plans 22 Public Hearings
FSC Chairman Peng Jinlong stated in an interview on April 30 that the draft of the “Virtual Asset Service Act” is entering the final revision stage and is expected to be submitted to the Executive Yuan by the end of June. To fully consolidate suggestions from all sectors of society, the FSC will hold at least 22 public hearings, aiming to create a legal framework that balances innovation and risk management.
Industry Expects Tiered Management and More Diverse Virtual Asset Products
Most industry participants suggested at the public hearings that the regulatory system should adopt a “gradual” and “tiered management” principle, applying different levels of regulatory intensity based on the size and business risk of operators. They also called on the government to moderately open up the operation of more diverse products such as ETFs and perpetual contracts to domestic operators to avoid losing opportunities to foreign platforms, which would create competitive disadvantages for local firms.
VASP Association Proposes Three Recommendations: Tiered Regulation, Extended Transition Period, and Learning from Hong Kong’s Experience
The Virtual Asset Service Providers Association (VASP Association) pointed out that the “Virtual Asset Service Act” could reference the “Regulations Governing Electronic Payment Institutions” to differentiate regulatory intensity based on the amount of assets held and business risk. For example, a licensing system could be applied to large operators, while smaller, lower-risk operators could maintain a registration system. Additionally, they suggested extending the current six-month transition period in the draft to one year, following Hong Kong’s experience in combating terrorist financing, to provide operators with more ample adjustment time.
HOYA BIT Calls for Clear Standards for Asset Listing and Delisting; Auditing System for Stablecoins is Essential
HOYA BIT founder Peng Yunxian stated that the government should establish a clear and gradual review standard and process for the listing and delisting of virtual assets to help stabilize the market and enhance transparency. She also suggested setting up a warning mechanism and a buffer period to reduce market volatility caused by asset delisting. Regarding stablecoins, Peng emphasized the need for issuers to maintain sufficient reserves and regularly disclose audit reports to ensure asset exchangeability and security.
MaiCoin Suggests Incorporating More Financial Innovation Products
The local large virtual asset platform MaiCoin Group suggested that future regulations should include more potential virtual asset businesses, such as cryptocurrency ETFs, perpetual contracts, and dual currency options, to encourage innovative development while avoiding foreign platforms from monopolizing emerging business opportunities, thus widening the competitive gap.
Legal Scholar Yang Yueping: The Draft Has a Flexible Framework; Details Should Be Left to Sub-Legislation
Regarding the content of the draft, Associate Professor Yang Yueping from the National Taiwan University College of Law pointed out that while the current draft does not list specific execution details, it already has a preliminary structure for tiered management. If the main legal text is overly detailed, future amendments may face difficulties; therefore, detailed provisions should be supplemented and adjusted through future sub-laws, regulatory orders, or administrative rules.
Special Law for Lending Business: A Rare International Institutional Breakthrough
Yang further explained that this draft officially includes “virtual asset lending business” for the first time, marking an important breakthrough compared to the current registration system. The model allows investors to lend stablecoins to operators, who then provide interest compensation. This type of business remains one of the few areas under legal regulation internationally. If Taiwan can take the lead in regulation, it will help enhance market trust and regulatory competitiveness.
New Law Expected to Be Implemented in Two Years; Reform Still Has Room for Improvement
Although the draft is nearing completion and will be submitted for review, academia generally estimates that even if the legislative third reading is completed this year, it will still take at least two to three years for formal implementation. This period will be a golden opportunity for the government and industry to collaborate, experiment, and refine the regulatory model. Whether future regulations can secure investor rights while leaving room for industry innovation will be the key measure of the new law’s success or failure.
Risk Warning
Investing in cryptocurrencies carries a high risk, as their prices can fluctuate dramatically, and you may lose your entire capital. Please assess the risks carefully.
