Woofun AI reports that Taiwan's Legislative Yuan has enacted a law establishing a mandatory regulatory framework for cryptocurrencies and stablecoins. This legislation requires all virtual asset service providers to secure regulatory approval before operating within the jurisdiction. The Financial Supervisory Commission confirmed that the bill marks the first comprehensive legal structure for digital assets in the country, aligning Taiwan with regulatory regimes in Japan, Singapore, and Hong Kong.

Stablecoin issuers face strict operational mandates, including the necessity to obtain dual approval from the central bank and the Financial Supervisory Commission. Issuers must maintain sufficient reserves held by a trustee and submit to regular audits to ensure solvency. These measures are designed to strengthen trader protection and facilitate Taiwan's integration into the international financial market.

The new rules encompass seven distinct categories of virtual asset service providers, ranging from exchanges and trading platforms to custodians and lenders. Each entity must adhere to rigorous standards covering internal controls, cybersecurity, asset segregation, and financial reporting. Per Woofun AI, the legislation explicitly outlaws crypto-based fraud and price manipulation, imposing prison sentences of three to 10 years and fines between 10 million and 200 million New Taiwan dollars ($300,000 to $6.3 million) for violators.

Unlicensed operations or unauthorized stablecoin issuance carry equally severe consequences, with penalties reaching up to seven years in prison and fines of 100 million New Taiwan dollars ($3.1 million). While the specific implementation date awaits publication by the executive branch, existing entities with anti-money laundering registration must apply for a full license within 12 months of the rules taking effect. Lawmakers simultaneously passed a resolution urging the Financial Supervisory Commission to propose a plan for derivative crypto commodity services within one year to diversify investment options. This legislative move solidifies Taiwan's position as a regulated jurisdiction, setting a precedent for future enforcement actions against illicit digital asset activities.