Taiwan’s new crypto law gives banks the first real stablecoin advantage
Taiwan has turned stablecoin issuance into a licensed, supervised activity under the Virtual Asset Service Act, passed on June 30. The new framework requires Financial Supervisory Commission approval, full reserve backing, segregated reserves held in trust through domestic financial institutions, regular audits, and no interest or other returns to holders. Existing VASPs that already registered under AML rules will need to transition into the licensing regime after the law takes effect. The practical effect is to favor banks, trust companies, custodians, and compliance-heavy crypto firms that can meet reserve, custody, disclosure, cybersecurity, and business-continuity standards. Stablecoins are treated less like ordinary crypto products and more like regulated payment infrastructure. Nonbank issuers may still compete, but only if they can satisfy institutional-scale safeguards. The next key test is the secondary rules, which will define eligibility, reserve composition, redemption, and treatment of existing stablecoin activity.
