Taiwan's Cryptocurrency-Specific Law to be Submitted to Legislative Yuan This Session, Peng Jinlong: Formal Guidelines to be Established Within Six Months, Two Landing Channels for Offshore Exchanges to be Opened

Financial Supervisory Commission Chair Peng Jinlong confirmed on March 23rd during a meeting of the Legislative Yuan’s Finance Committee that the Virtual Asset Service Law draft has completed Executive Yuan review and has been prioritized as a bill, expected to be submitted to the Legislative Yuan in this session. Regarding bank custody services, 19 banks are interested, 5 are in trial operation, and formal guidelines will be established within six months. Over 30 unregulated overseas exchanges must establish local entities or set up new ones under special laws to operate legally.

(Previous summary: Six key points from Taiwan’s public hearing on the Virtual Asset Service Law)

(Background supplement: Peng Jinlong of the FSC: Taiwan’s stablecoins will be issued first by “financial institutions”)

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• Bank Custody: Guidelines within 6 months, Bitcoin as the main focus
• Accounting standards soon to be implemented, with regulatory flexibility retained in the law
• Overseas Exchanges: Over 30 unregulated, only two pathways for compliance
• Derivative Products: Focused on stability, not to be opened easily for now

Taiwan’s crypto regulation is entering the final countdown. FSC Chair Peng Jinlong clearly stated on March 23rd during a Legislative Yuan Finance Committee inquiry that the Virtual Asset Service Law draft has passed Executive Yuan review and has been designated as a priority bill, expected to be submitted to the Legislative Yuan this session.

Bank Custody: Guidelines within 6 months, Bitcoin as the main focus

Banks are actively preparing. Peng Jinlong revealed that 19 banks have expressed interest in virtual asset custody services, with 5 in trial phase. Each bank is using different technical solutions, and the FSC aims to develop more efficient approaches. He promised that within six months, formal guidelines for virtual asset custody will be established, enabling banks to start offering services once completed.

Peng emphasized that banks are trusted financial institutions, and their involvement in custody can provide better protection for holders. Director of the Banking Bureau Tong Zhengzhang added that the trial period is set for one year, referencing Hong Kong’s related guidelines. Currently, only limited cryptocurrencies, mainly Bitcoin, are accepted for custody.

Accounting standards soon to be implemented, with regulatory flexibility retained in the law

Securities and Futures Bureau Director Gao Jingping pointed out that the accounting sector has outsourced research on how to record virtual assets, with related guidelines expected to be released between late March and April to fill the current gray area in accounting treatment.

In terms of regulatory framework design, the draft Virtual Asset Service Law retains a clause allowing “other virtual asset businesses with approval from the competent authority,” providing regulatory flexibility. This allows authorities to respond promptly to industry evolution without needing frequent amendments.

Overseas Exchanges: Over 30 unregulated, only two pathways for compliance

Legislator Lin Da-hua pointed out a regulatory gap: only 8 VASPs have completed AML registration, but over 30 active overseas platforms operate outside the regulatory framework.

Peng Jinlong responded that virtual asset services have historically been largely unregulated globally. The law will establish a comprehensive supervision mechanism. Regarding overseas exchanges, he clearly stated there are only two ways to operate legally: establish a local branch in Taiwan or set up a new entity under the law. He also revealed that several overseas exchanges have proactively inquired about establishing branches. Those soliciting business in Taiwan without a local presence will be considered illegal.

The 8 registered operators currently comply with strict AML requirements, including the international Travel Rule.

Derivative Products: Focused on stability, not to be opened easily

Regarding virtual asset derivatives, the FSC maintains a cautious stance. Peng Jinlong stated that virtual asset products are already complex to understand, and opening higher-volatility derivatives may not be appropriate. He emphasized that further discussions on opening such products will only occur after industry participants demonstrate sufficient capability and risk management.

As the legislative review progresses, along with custody guidelines and accounting standards, Taiwan’s crypto regulatory framework is rapidly taking shape. Based on coordination among the Legislative Yuan and various FSC agencies, the contours of Taiwan’s compliant crypto market are expected to become clearer by late 2026.