Taiwan FSC drafts eight VASP rules ahead of new licensing regime

Taiwan’s Financial Supervisory Commission (FSC) on 3 November said it had drafted eight authorised regulations under the Virtual Asset Service Act. The draft package covers VASP establishment, responsible and business personnel, business and financial management, internal controls and audit, outsourcing, suspicious or abnormal accounts and transactions, financial reporting, and VASP trade associations. The drafts will be published for public comment “in the near future” under Taiwan’s Administrative Procedure Act. They are not yet final rules.

The proposals are the operating layer for the Act, which was promulgated on 22 July 2026. The Executive Yuan has not yet set its commencement date. The FSC says the Act and its authorised subsidiary rules will be aligned for transition purposes, including for VASPs already registered for anti-money laundering purposes and financial institutions already providing virtual asset services.

Capital, guarantees and restricted entry

The proposed minimum paid-in capital is:

- NT$50m for exchange, transfer or underwriting providers;
- NT$100m for trading-platform or custody providers; and
- NT$200m for lending providers.

A provider conducting more than one business must add the applicable amounts. Financial institutions conducting VASP business and overseas VASPs establishing Taiwanese branches would also have to allocate dedicated operating funds at those levels.

The drafts would initially allow only banks already providing virtual asset custody services to operate VASP businesses. The FSC says participation by other financial institutions may expand as the industry develops. The initial permitted activities would be exchange, transfer, custody and underwriting. Exchange and transfer services offered by financial institutions would be limited to corporate customers. The draft would retain flexibility for the FSC to permit other activities later, including as new-taiwan-dollar stablecoin use develops.

VASP operating guarantees would be NT$10m for exchange, transfer or underwriting providers, NT$30m for platform or custody providers, and NT$50m for lending providers. These amounts would be aggregated for multiple business lines, and the FSC could increase them based on capital, business scale and risk.

Custody providers would face an additional asset-linked requirement. On 30 June and 31 December each year, they would have to deposit 2.5% of the value of assets under custody, after deducting assets held by commissioned financial institutions or other FSC-approved items.

In Atlas’s view, the structure signals that the FSC is treating custody and lending as balance-sheet and liquidity risks, not simply as conduct issues. The capital, guarantee and asset-linked layers would make the cost of authorisation rise with the activities and customer assets a provider handles.

Lending, staff and controls

The lending category receives specific treatment because a lending provider borrows virtual assets from customers while owing a continuing obligation to return an equivalent or greater amount or value. To qualify, a provider would need either at least one year operating a trading platform, or at least two years conducting both exchange and custody activities. The draft would also restrict the purposes, amounts and types of virtual assets that may be used or borrowed.

Business personnel would need to complete at least 24 hours of VASP specialist courses, pass an examination and obtain a completion certificate. They would then have to complete pre-employment training within six months of joining and undertake in-service training every two years.

The internal-control draft would require each VASP to design and operate controls covering its own activities and those of its subsidiaries. The framework would include self-assessment, compliance, risk management, information-security management and internal audit, described by the FSC as a three-lines internal-control model.

Financial reporting would have to follow applicable law and International Financial Reporting Standards. VASPs would have two months after each half-year end to publish and file accountant-reviewed interim financial statements, and three months after the financial year-end to publish and file audited annual statements.

The trade-association rules would require the VASP association to set self-regulatory standards covering member advertising and promotion, inspections of members’ financial and business operations, and dispute resolution. The FSC would therefore supervise through both firm-level requirements and an industry self-regulatory layer.

The next layer after the Travel Rule

The drafts follow the FSC’s 20 October amendments, which require VASPs to apply Travel Rule information requirements to transfers of every value and add enhanced information and verification requirements above NT$30,000. Those amendments addressed transaction data and transfer controls under the existing AML perimeter. The new package would add licensing, capital, governance, financial reporting and customer-asset safeguards.

The Central Bank of the Republic of China was also consulted. The drafts would include personnel qualification requirements, annual customer management limits and transaction controls to support foreign-exchange supervision. They would also allow the central bank to require VASPs to report virtual asset transaction data for monetary-policy and statistical analysis.

A separate FSC announcement on 3 November previewed stablecoin issuance and management rules, together with further AML amendments, also to be issued under the Act.

Existing AML-registered VASPs and financial institutions already providing virtual asset services would receive transition provisions covering licence applications, financial and business management, personnel requirements and internal controls. The practical timetable begins when the FSC publishes the drafts in the Executive Yuan Gazette. Comments will be accepted for 40 days from the day after that publication.