The Financial Supervisory Commission recently previewed draft regulations governing licensing and administration of stablecoin issuance, along with eight draft authorized orders under the Virtual Asset Service Act, to establish a virtual asset regulatory framework and strengthen anti-money laundering measures. All drafts will undergo a 40-day public comment period after announcement, and the FSC will consolidate opinions from all sectors before issuing final rules in line with the effective date of the Virtual Asset Service Act.
Issuance Eligibility Limited to Banking System
Regarding issuance eligibility, considering international regulatory trends and reports by the Financial Action Task Force on Money Laundering, the FSC limits eligibility to banks, financial holding companies or bank-invested companies, and other institutions to be announced by the FSC in the future. Non-bank issuers must have NT$300 million in paid-in capital and may only engage in stablecoin issuance and redemption business. Stablecoins referred to here are cryptocurrencies pegged one-to-one to the New Taiwan dollar or a single foreign currency.
Reserve Assets Must Be Sufficient With Identity Verification
Issuers must ensure the fair value of reserve assets is no less than the total amount of stablecoins in circulation, and regularly commission certified public accountants to conduct audits. To strengthen transaction security, issuers must verify the identities of both buyers and sellers before processing transactions. The FSC will also designate stablecoin issuers as financial institutions under the Money Laundering Control Act, requiring them to comply with relevant anti-money laundering regulations. In addition, issuers must establish internal control and audit systems, business continuity plans and information security management systems, and be able to promptly cooperate with competent authority requirements to restrict the transfer or disposal of stablecoins.
Tiered Capital and Guarantee Deposit Thresholds for Service Providers
For virtual asset service providers, the eight drafts cover establishment licensing, responsible person and employee management, business and financial management, internal controls, outsourcing operations, suspicious or unusual transaction management, financial report filing, and industry association management. Those engaged in trading, transfer or underwriting business are subject to a minimum paid-in capital of NT$50 million, trading platforms or custody business to NT$100 million, and lending business to NT$200 million. Service providers must also pay an operating guarantee deposit of NT$10 million to NT$50 million, while custody operators must additionally set aside 2.5% of their virtual asset custody balances each year as additional guarantee deposits. In the future, the FSC will gradually open virtual asset business to financial institutions, initially allowing banks to engage in exchange, transfer, custody and underwriting business, with exchange and transfer business limited to corporate clients. Business personnel of service providers must complete at least 24 hours of professional training and pass examinations.