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 & Regulatory Framework

Cryptocurrency Status

Taiwan’s Central Bank classifies cryptocurrencies as “highly speculative virtual commodities” rather than legal tender. The Financial Supervisory Commission (FSC), 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 major 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. The draft Virtual Asset Services Act, announced by the FSC in March 2025, introduces the broader term “virtual assets” as the primary regulatory category and would establish a comprehensive licensing regime beyond AML obligations.

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%. Notably, the taxable event is triggered when fiat currency is deposited into a bank account, not at the time of trade.

Gains earned through overseas exchanges (such as Binance or OKX) are classified as “overseas income” and must be included in the personal basic income calculation if total overseas income exceeds TWD 1,000,000 per year. If total basic income exceeds TWD 6,700,000, a 20% Alternative Minimum Tax applies under the Income Basic Tax Act.

Corporate crypto profits are subject to the standard corporate income tax rate of 20%. Security token transactions carry a 0.1% securities transaction tax. Mining and staking income follows the same treatment as other crypto gains, taxable when converted to fiat currency. The Ministry of Finance has acknowledged gaps in crypto tax enforcement and pledged to address cryptocurrency taxation, though no comprehensive reform has materialized.

Regulatory Oversight

The FSC serves as Taiwan’s primary crypto regulator, with the 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 handles AML enforcement and serves as Taiwan’s FATF/APG liaison.

The Taiwan VASP Association, established in June 2024 with 24 founding members, plays a significant self-regulatory role. 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. All VASPs must join the Association before commencing operations.

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 gradually changing through a bank custody pilot program launched by the FSC.

The pilot, with an application window from January 1 to April 30, 2025, allows banks to offer virtual asset custody services. Four banks received FSC approval by late 2025, with the pilot lasting six months followed by a review period. 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 draft Virtual Asset Services Act, 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.

Licensing Requirements

Under the current MLCA-based regime, only domestic registered companies, limited partnerships, or branches of foreign companies registered in Taiwan are eligible for VASP registration. The registration process requires AML compliance systems, appointment of qualified compliance officers, internal control mechanisms, and annual risk assessment reports filed with the FSC by March 31 of each year. Unregistered VASP operators face up to two years imprisonment and fines up to NT$5 million (approximately USD 155,900).

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. Foreign platform operators that fail to register are barred from soliciting business or marketing to the Taiwanese public.

The pending Virtual Asset Services Act would upgrade the regime from registration to full FSC approval, introducing capital requirements, financial reporting obligations, statutory liabilities, and eight subordinate regulations.

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 rules issued by the Taipei Exchange (TPEx), while larger offerings require sandbox experimentation. Participation is restricted to professional investors, with individual natural persons capped at NT$300,000 per STO. Due to these stringent restrictions, only one STO program has been launched, and the regime is widely considered too restrictive to be practical.

The Central Bank completed a wholesale CBDC technical study in late 2023 and finished prototype testing in late 2024, building on technology developed for pandemic-era digital voucher distribution. A pilot phase was planned for 2025, with the Central Bank emphasizing steady progress over speed, focusing on wholesale CBDCs and deposit tokens rather than retail issuance.

Market Characteristics

Adoption Patterns

Taiwan’s crypto market features active retail participation alongside a growing institutional presence. Domestic exchanges such as MaiCoin, BitoPro, and ACE have served the local market, while many Taiwanese traders also use overseas platforms. The entry of traditional banks into crypto custody in 2025 signals a gradual institutional opening. Taiwan has branded itself as a potential “Blockchain Island,” though regulatory progress has been slower than some neighboring jurisdictions.

Industry Focus

Taiwan’s crypto industry centers on exchange services, with a nascent but growing focus on custody solutions following the bank pilot program. The country’s strong semiconductor and technology manufacturing base provides infrastructure advantages for blockchain development, though the regulatory environment has constrained more specialized activities like tokenization and DeFi services. The first regulated stablecoin is expected to launch in the second half of 2026 at the earliest, pending passage of the Virtual Asset Services Act.

Regulatory Evolution

Taiwan’s regulatory trajectory has moved from a hands-off approach to increasingly structured oversight. The FSC’s designation as competent authority in 2023, the MLCA amendment in 2024, and the draft Virtual Asset Services Act in 2025 represent an accelerating regulatory timeline. The shift from voluntary compliance declarations to mandatory registration with criminal penalties marks a significant toughening of enforcement.

In regional context, Taiwan trails Japan, Singapore, and Hong Kong in regulatory maturity but is actively converging toward comprehensive frameworks similar to South Korea’s Virtual Asset User Protection Act. Taiwan’s banking restrictions on crypto remain stricter than those in Japan and Singapore, and its STO regime is the most restrictive in the region.

Taiwan achieved the Asia/Pacific Group on Money Laundering’s (APG) highest evaluation category of “regular follow-up” in its 2019 mutual evaluation, a significant improvement from its 2011 “enhanced follow-up” status. This favorable standing reflects strong institutional AML/CFT frameworks that now extend to the virtual asset sector through the 2024 MLCA amendments.

For Current Information:

• Financial Supervisory Commission (FSC)
• Securities and Futures Bureau (SFB) – VASP Registration
• Central Bank of the Republic of China (Taiwan)
• Ministry of Justice Investigation Bureau (MJIB)