Taiwan's legislature passed the Virtual Asset Service Act in its third reading on June 30, creating the country's first licensing framework for cryptocurrency service providers and stablecoin issuers. The act grew out of a member's bill, Legislator Ko, Ju-chun (葛如鈞) introduced with 19 co-sponsors on March 20, later merged with the Executive Yuan's version during Finance Committee review. For Ko — a longtime blockchain advocate — the moment came down to one word: finally.
Ko Ju-chun is an at-large member of Taiwan's 11th Legislative Yuan, focused on AI governance, cybersecurity resilience, and communications infrastructure.
"There's only one word for it — finally," Ko told The Storm Media in an exclusive interview, calling the third-reading passage Taiwan's "clarity moment." He said the law's real significance is that it strips away the stigma that had surrounded digital assets, clearing the way for a longer-term idea he has championed: a national Bitcoin reserve. In his official remarks on the legislative floor after the vote, Ko separately said the act means Taiwan will not be absent from the next era of digital finance.
From Registration to Licensing After A Decade Of Caution
Under the new law, virtual asset service providers (VASPs) are classified into seven categories: exchange operators, trading platform operators, transfer service providers, custodians, underwriters, lending service providers, and others. According to the Financial Supervisory Commission (FSC), firms must meet statutory thresholds across capital requirements, fitness standards for executives and key personnel, internal control and audit systems, cybersecurity management, asset listing review mechanisms, and segregated custody of client assets.
Existing operators that have completed anti-money laundering (AML) registration have 12 months from the law's effective date to apply for FSC authorization, and 21 months to obtain a full license, with a single possible three-month extension. Analysts at PwC Taiwan noted that Taiwan's VASP oversight has formally shifted from a single AML lens to a comprehensive framework encompassing business supervision, investor protection, and financial stability.
In the interview, Ko traced Taiwan's early engagement with blockchain. Between 2010 and 2014, local developers were active in open-source communities and won multiple Bitcoin hackathons. From 2014 to 2016, Bitcoin available for purchase at convenience stores briefly made Taiwan an international talking point. After 2016, however, regulatory attitudes tightened — a shift Ko described as "not particularly healthy for developers, local exchanges, or technologists like myself."
🔥 Historic moment: Taiwan's Virtual Asset Service Provider Act (VASPA) just passed its third reading. We're officially entering a new era of digital finance.
— 科技立委葛如鈞 Ko Ju-Chun (@dAAAb) June 30, 2026
Anti-fraud shouldn't kill innovation — and innovation can't sacrifice people's assets. Client asset segregation,… pic.twitter.com/QLsjNmRRdP
Stablecoin Issuers Need An FSC License — With Central Bank Sign-Off
The law dedicates a separate chapter to stablecoins. Issuers seeking to operate in Taiwan must obtain an FSC license, which the regulator may grant only after consulting the central bank and securing its concurrence — a single licensing track with a built-in central bank veto. Issuers are required to maintain full reserve assets held in trust, submit to regular audits, and make ongoing disclosures. The payment of any form of interest or yield to holders is prohibited.
During the legislative process, Ko said he focused particular attention on the transition arrangements for internationally circulating stablecoins. He was concerned that an abrupt prohibition on widely used tokens such as USDT and USDC could disrupt existing market activity. The final text preserves flexibility through the phrase "unless otherwise stipulated by the competent authority," with the FSC required to establish related rules in consultation with the central bank — preserving a buffer for existing market participants.
Ko disclosed in the interview that he and representatives from the Bitcoin Policy Institute held closed-door meetings with central bank deputy governors and deputy-chair-level officials, and found the institution's posture markedly warmer than anticipated. "We were surprised to find that the central bank's depth of knowledge and positive thinking on virtual assets far exceeded our original expectations," he said. He stressed that the central bank would make its own determinations on timing and specific asset classes, "but the atmosphere now is at least open and constructive."
Market Manipulation Now Carries Up To 10 Years In Prison
The law explicitly prohibits fraudulent, deceptive, or manipulative conduct affecting virtual asset prices or supply and demand. Violations carry a sentence of three to 10 years' imprisonment and fines ranging from NT$10 million to NT$200 million. Operating an unlicensed VASP business is punishable by up to seven years' imprisonment and fines of up to NT$100 million — a substantial increase from the existing AML framework's maximum of two years and NT$5 million. The law also expressly permits traditional financial institutions to apply for authorization to conduct virtual asset-related business, provided they meet FSC qualification requirements.
The Bitcoin Reserve Case: A Second Line Of Defense
For Ko, the law's most consequential strategic implication lies in what it enables beyond immediate regulation: a pathway toward a national Bitcoin reserve. In the interview, he argued that given Taiwan's distinctive geopolitical situation, national resilience cannot rest solely on military deterrence and conventional economic strength. Taiwan also needs digital asset resilience — assets that cannot be frozen by third parties and can be independently verified. "Relying only on gold or dollar-denominated assets may not be flexible enough in extreme scenarios," he said.
He invoked Bitcoin's foundational principle — "Don't trust, verify" — and pointed to the law's explanatory text, which specifies that where victim assets take the form of virtual assets, they should in principle be returned or confiscated in their original form. In Ko's reading, that design effectively discourages the government from casually liquidating confiscated Bitcoin. "This is not yet a formal national reserve policy, but it is the first step toward accumulation," he said.
The position is consistent with his interpellation last November, when Ko called on the government to inventory its existing Bitcoin holdings. Neither the central bank nor the FSC has endorsed a national Bitcoin reserve, however, and both have repeatedly flagged price volatility and custody risks; the idea remains at the advocacy stage.
Stablecoins Gain Ground In The Semiconductor Supply Chain
Even before the law passed, Ko said, roughly 5% of Taiwan's supply chain and semiconductor firms were already using stablecoins for financial transactions, with another 4% actively planning to adopt them.
Those figures closely match a survey published by the Taiwan External Trade Development Council (TAITRA) on September 10, 2025, which — counting by number of firms — found 5.2% of Taiwanese manufacturers had already adopted stablecoins and 4.2% planned to do so. Taken together, the data suggest stablecoin usage has moved beyond experimentation into an early stage of practical settlement, with adoption reported to be higher still among Taiwanese businesses operating overseas.
Ko argued that Taiwan's global standing in advanced chip manufacturing gives it a structural advantage to position itself ahead of Asian peers in real-world asset tokenization (RWA) and supply chain finance.
What Comes Next: Derivatives Rules And A Taiwan Dollar Stablecoin
The legislature passed a supplementary resolution requiring the FSC to present a plan for virtual asset derivatives within one year. Ko said he expects detailed rules governing a Taiwan dollar-denominated stablecoin to emerge by late 2026 or early 2027, at which point both banks and licensed VASPs would be eligible to apply as issuers. He also noted that Taiwan currently permits only qualified investors to access offshore Bitcoin ETFs through sub-brokerage arrangements, and that a domestically listed Bitcoin ETF has not yet been approved — a development he identified as a key indicator to watch.
Ko's Message To Young Engineers: The Rules Are Set
Ko closed the interview by turning to the question of talent. Taiwan possesses the engineering strength that underpins world-class players like TSMC, he argued, and with a clear regulatory framework now in place, the moment has arrived to move from experimentation to real-world application. He also offered a longer horizon: as humanity eventually moves toward interplanetary civilization, blockchain-based value transfer technology will become indispensable infrastructure beyond Earth.
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