Crypto Overview in Taiwan

Regulatory data is for informational purposes only and may not reflect the most current legal developments. Always consult qualified professionals before making decisions.

Legal Classification and Regulatory Framework

Cryptocurrency Status

Taiwan’s Central Bank of the Republic of China (CBC) classifies cryptocurrencies as “highly speculative virtual commodities” rather than legal tender. The Financial Supervisory Commission (FSC, 金融監督管理委員會), designated as the competent authority for virtual assets by the Executive Yuan in March 2023, applies a bifurcated classification. Utility and payment tokens fall under the Money Laundering Control Act (MLCA) as “virtual currencies,” defined as digital representations of value using cryptography and distributed ledger technology that can be stored, exchanged, transferred, and used for payment or investment purposes. Tokens with securities characteristics are separately regulated under the Securities and Exchange Act (SEA).

A significant MLCA amendment enacted on July 31, 2024 formalized the regulatory framework for virtual asset service providers (VASPs), transitioning from a voluntary compliance declaration system to mandatory AML registration effective November 30, 2024. The draft Virtual Asset Services Act (VASA), released by the FSC on March 25, 2025, introduces the broader term “virtual assets” as the primary regulatory category and would establish a comprehensive licensing regime beyond AML obligations. The Executive Yuan approved the draft on April 2, 2026; as of May 2026, the bill awaits deliberation and passage by the Legislative Yuan.

Tax Treatment

Taiwan does not have dedicated cryptocurrency tax legislation. Existing income tax principles apply to crypto transactions. For individuals trading on domestic exchanges, profits from selling non-security virtual currencies are classified as “income from property transactions” under the Income Tax Act, subject to progressive tax rates ranging from 5% to 40%. Critically, the taxable event is triggered when fiat currency is deposited into a bank account, not at the time of the trade itself.

Gains earned through overseas exchanges are classified as “overseas income” and must be included in the personal basic income calculation if total overseas income exceeds NT$1,000,000 per year. If total basic income exceeds NT$6,700,000, a 20% Alternative Minimum Tax (AMT) applies under the Income Basic Tax Act. Corporate crypto profits are subject to the standard 20% corporate income tax rate. Security token transactions carry a 0.1% securities transaction tax. Mining and staking income follows the same treatment as other crypto gains, taxable upon conversion to fiat currency.

Regulatory Oversight

The FSC serves as Taiwan’s primary crypto regulator, with its Securities and Futures Bureau (SFB) maintaining the official register of AML-compliant VASPs. The Central Bank retains authority over monetary policy and CBDC development. The Ministry of Justice Investigation Bureau (MJIB) handles AML enforcement and serves as Taiwan’s FATF/APG liaison and national financial intelligence unit (FIU).

The Taiwan VASP Association, established in June 2024 with 24 founding members, operates as the sector’s self-regulatory organization (SRO). Between November 2024 and January 2025, the Association issued seven self-regulatory codes covering conduct standards, asset listing and delisting, customer protection, AML/CFT compliance, anti-fraud collaboration, cybersecurity management, and asset segregation and custody. Membership in the Association is required before commencing operations. FSC Chairman Peng Jin-long (彭金隆) has been the lead regulatory voice driving the transition to full VASA licensing.

Business Environment

Banking Relationships

Traditional banks in Taiwan have historically been prohibited from providing cryptocurrency-related services, including facilitating credit card purchases of crypto. This strict separation between banking and crypto sectors is evolving through a bank custody pilot program launched by the FSC with an application window from January 1 to April 30, 2025. Four banks received FSC approval under the pilot by late 2025, with a six-month operating period followed by a review. Banks must specify whether custody services target VASPs, professional investors, or general investors, and must establish management mechanisms for operations, information security, and cold/hot wallet infrastructure.

For fiat money custody, VASPs must maintain either a trust arrangement or bank performance guarantee. Annual CPA audit reports on customer assets are required. Under the pending VASA, banks could qualify as VASPs and participate in government-approved stablecoin frameworks, with stablecoin issuers required to store full reserve assets with domestic financial institutions. Many currently registered VASPs rely on offshore banks or fintech intermediaries for operational banking while domestic relationships normalize.

Innovation Support

Taiwan’s Financial Technology Development and Innovative Experimentation Act (the “Sandbox Act”), established in 2018, provides a regulatory sandbox for fintech innovation with an investment limit of NT$200 million. Security Token Offerings (STOs) above NT$30 million must first enter the sandbox before proceeding under the SEA. The STO framework, regulated since July 2019 with detailed rules finalized in January 2020, operates on a two-tier structure: STOs of NT$30 million or less may proceed under Taipei Exchange (TPEx) rules, while larger offerings require sandbox experimentation. Participation is restricted to professional investors, with individual natural persons capped at NT$300,000 per STO.

The FSC established a Real-World Asset (RWA) Tokenisation Task Force targeting tokenization of bonds and investment funds. The Central Bank completed a wholesale CBDC (wCBDC) feasibility study in late 2023, confirming prospects for streamlining interbank payments and reducing settlement costs. A public consultation tour launched in April 2025 to discuss the wCBDC proof-of-concept architecture, with Central Bank President Yang Chin-long emphasizing steady progress over speed and no fixed launch timeline.

Crypto License in Taiwan

Taiwan operates a two-stage licensing trajectory. The current regime under the 2024 MLCA amendments requires all VASPs to complete AML registration with the FSC before commencing any business. Approximately 23 VASPs had completed registration as of early 2026, including the initial batch of 9 approved in September 2025. Once the Virtual Asset Services Act passes the Legislative Yuan, the regime will upgrade from AML registration to full FSC licensing, requiring VASPs to apply for a formal license within six months of the law taking effect and obtain approval within fifteen months.

Licensing Requirements

Under the current MLCA-based AML registration regime, eligible applicants must be domestic registered companies, limited partnerships, or branches of foreign companies incorporated under Taiwan’s Company Act. Core requirements include establishing internal AML/CFT control systems, appointing qualified compliance officers, implementing information security mechanisms, and filing annual risk assessment reports with the FSC by March 31 of each year. Offshore VASPs must establish a local entity before registering. Unregistered operators face up to two years imprisonment and fines of up to NT$5 million for individuals; legal entities face fines up to NT$50 million.

The FSC published 10 Guiding Principles for the crypto industry in September 2023, covering transaction transparency, customer asset custody, internal controls, external audits, listing and delisting review mechanisms, and provisions for on-site FSC inspections. The FSC conducted AML inspections of 4 firms in 2023, 6 in 2024, and 12 in 2025, reflecting increasing enforcement intensity.

Authorized Activities

Registered VASPs may provide exchange services between virtual assets and fiat currency, virtual-to-virtual asset exchange, transfer services, custody and administration of virtual assets, and participation in or provision of financial services relating to a virtual asset offering. Under the pending VASA, financial institutions may also operate VASP services alongside their other licensed activities with additional FSC approval, subject to the same asset segregation and internal control requirements as standalone VASPs. Stablecoin issuance requires separate FSC authorization under Articles 34 and 35 of the VASA draft, with mandatory full reserve backing held at domestic financial institutions.

Application Process and Timeline

Under the current AML registration regime, applicants submit documentation to the FSC’s Securities and Futures Bureau, covering corporate registration, AML/CFT compliance systems, compliance officer qualifications, information security policies, and annual risk assessment frameworks. Processing timelines vary; the initial September 2025 approval batch took several months from submission. All approved VASPs must join the Taiwan VASP Association as a condition of registration.

Under the forthcoming VASA framework, VASPs will incorporate as companies limited by shares, meet minimum capital requirements, deposit an operational guarantee bond, and demonstrate that responsible persons and key operational staff meet FSC qualification standards. Customer assets must be segregated from the VASP’s own assets and are protected from creditor claims in insolvency. Eight subordinate regulations will detail specific capital thresholds, reporting obligations, and operational standards following the VASA’s passage. Currently registered VASPs are subject to the transitional period: six months to apply for a formal license and fifteen months to obtain approval after the new law takes effect.

Market Characteristics

Adoption Patterns

Taiwan’s crypto market features active retail participation alongside a growing institutional presence. Domestic exchanges including MaiCoin/MAX, BitoPro (BitoEX group), and ACE Exchange have served the local market, while many Taiwanese traders also use overseas platforms. The May 2025 hack of BitoPro, which resulted in losses of approximately US$11.5 million from hot wallets, highlighted security vulnerabilities in the sector and accelerated legislative urgency for the VASA’s passage. The entry of traditional banks into crypto custody in 2025 signals gradual institutional opening.

Industry Focus

Taiwan’s crypto industry centers on exchange services, with a growing focus on custody solutions following the bank custody pilot. The country’s strong semiconductor and technology manufacturing base provides infrastructure advantages for blockchain development. The first regulated stablecoin is expected in the second half of 2026 at the earliest, contingent on VASA passage and a subsequent six-month regulation drafting period. FSC Chairman Peng Jin-long confirmed this timeline at a December 2025 legislative hearing. In the initial stage, only financial institutions will be permitted to issue stablecoins, per agreement between the FSC and the Central Bank.

Regulatory Evolution

Taiwan’s regulatory trajectory has accelerated from a hands-off approach to structured oversight. The FSC’s designation as competent authority in 2023, the MLCA amendment in 2024, approximately 23 VASP registrations by early 2026, Executive Yuan approval of the VASA in April 2026, and a target legislative passage in mid-2026 represent a compressed but coherent regulatory timeline. The shift from voluntary compliance declarations to mandatory AML registration with criminal penalties, and then to a full licensing regime, marks a significant maturation of the framework.

In regional context, Taiwan is actively converging toward frameworks comparable to South Korea’s Virtual Asset User Protection Act and Japan’s Payment Services Act, while explicitly drawing on the EU’s MiCA regulation for the VASA’s architecture. Taiwan achieved the Asia/Pacific Group on Money Laundering’s (APG) highest evaluation category of “regular follow-up” in its 2019 mutual evaluation, reflecting institutional AML/CFT strength now extended to the virtual asset sector. Banking restrictions on crypto remain stricter than in Japan or Singapore, though the custody pilot and VASA provisions for financial institution VASPs indicate the gap is narrowing.