Taiwan, China Passes "Virtual Asset Service Act", Crypto Regulatory Framework Officially Established

According to The Block, the Legislative Yuan of Taiwan, China passed the "Virtual Asset Service Act" on July 1 upon third reading. The bill has been submitted to Taiwan regional leader Lai Ching-te for signature, and the implementation date is expected to be announced within 10 days. The core points of the bill are as follows: • Licensing Requirements: Virtual asset service providers must apply for permission from the Financial Supervisory Commission (FSC). Platforms that have completed AML registration have a 12-month application period and a 21-month approval period. • Stablecoin Regulation: Issuing or managing stablecoins requires dual approval from both the Central Bank and the FSC, and sufficient reserves must be maintained. • Compliance Requirements: Covering aspects such as cybersecurity, segregation of customer assets, and internal controls. • Criminal Penalties: Illegal operation carries a maximum sentence of 7 years imprisonment and a fine of up to NTD 100 million (approximately USD 3.14 million); crypto market manipulation carries a maximum sentence of 10 years and a fine of up to NTD 200 million (approximately USD 6.28 million). Industry insiders noted that crypto businesses previously operating in legal gray areas will no longer be able to rely on regulatory ambiguity. Traditional financial institutions will also be allowed to apply for VASP licenses in the future, and existing crypto businesses may face more intense competitive pressure.