The special law sets a 12-month deadline for existing operators to apply and 21 months to obtain a license. The penalty for operating without a license is 7 years. Lending and stablecoins are also regulated for the first time. (Preliminary summary: Taiwan’s first encryption law, the “Virtual Asset Services Act”, has passed three readings: VASP comprehensive licensing system, triple threshold for stable coins, and the most critical 10-year barrier for fraud) (Background supplement: Attention! Taiwan’s new cryptocurrency transfer system will be launched in October, and the Travel Rule requires birth date and address for transactions exceeding 30,000 yuan) The Financial Supervisory Commission expects that the Virtual Asset Services Law (hereinafter referred to as the special law) and the sub-law will be implemented simultaneously in the first quarter of next year, but the implementation date will be announced by the Executive Yuan and has not yet been determined. On the 11th, Huang Houming, deputy director of the Securities and Futures Bureau, delivered a speech at the "Virtual Asset Forum" hosted by the OTC Buying Center and other units. He said that the management scope will be expanded to include finance, business, information security and stable coins. The special law was read for the third time in June this year and announced on July 22. There are 9 draft sub-laws announced by the Financial Supervisory Commission on 11/3, 8 of which manage virtual asset service providers (English abbreviation VASP, exchanges are only one of them), and 1 manages the issuance of stable coins. Huang Houming mentioned that Taiwan’s supervision has gone from requiring businesses to comply with money laundering prevention controls and promoting industry self-discipline to amending the Money Laundering Prevention Act and changing the registration system. Special laws are the fourth stage. How long does it take for existing exchanges to obtain a license? Article 55 of the Special Law stipulates that VASPs that have completed money laundering prevention registration before implementation must apply for a license within 12 months after implementation and obtain a license within 21 months; if necessary, the acquisition period can be extended by 3 months, limited to one time. If you fail to apply or get it within the expiration date, you will not be able to continue operating. If we extrapolate based on the implementation in the first quarter of next year, existing operators will need to deliver packages before the first quarter of 2028 and obtain licenses before the fourth quarter of 2028. In other words, the exchange will not shut down overnight on the day of implementation next year. Registered operators can continue to operate within the period, and those who fail to obtain the license must be closed down. The criminal liability for operating without a license has also been significantly increased. During the registration system of the Money Laundering Prevention Law, unregistered operations were punishable by up to 2 years in prison; Article 48 of the Special Law was changed to a maximum of 7 years, and a fine of not more than NT$100 million may be imposed, and legal persons must also be fined. In terms of capital thresholds, the draft sub-law stipulates that trading platform operators (generally referred to as exchanges) must have a paid-in capital of at least 100 million yuan and must pay a business deposit of 30 million yuan. What new things will be added? The first is borrowing. The special law includes virtual asset lending under management. Lenders must have a paid-in capital of at least 200 million yuan, and they must first operate a trading platform for one year, or have both exchange and custody businesses for two years. The second is stablecoins. According to the draft stablecoin issuance permit, the issuer can be a bank, financial holding or bank-invested company, and can only issue stablecoins linked 1:1 to the New Taiwan dollar or a single foreign currency; non-bank issuers must have a paid-in capital of at least 300 million yuan, and they must also issue publicly. The third is the bank. In the initial stage, only banks that have actually taken over the custody of virtual assets will be open to operate four types of businesses: exchange, transfer, custody, and underwriting. Exchange and transfer are only limited to corporate customers; trading platforms and lending are not currently open to banks. New businesses may also emerge in the future. Paragraph 7 of Article 6 reserves "other virtual asset services approved by the competent authority." Huang Houming said that new business types can be opened by administrative order, and there is no need to submit the law to the Legislative Yuan every time. What else is undecided? The most critical thing is the implementation date. The application period and license period of Article 55 are calculated from the implementation date. Before the Executive Yuan’s announcement, there is no starting point for operators to submit documents. The sub-law is still in the notice stage, and the Financial Supervisory Commission will receive opinions for 40 days. The capital amount, margin and other figures may still be adjusted before they are finalized. In addition, the draft mentions that it has consulted with the central bank to formulate "customer annual management quotas and transaction control mechanisms" in conjunction with foreign exchange management, but the amount of the quota has not yet been specified. The practical work of declaration and review is assisted by the counter purchase center. Chairman Jian Lizhong said at the forum that the counter-buying center has assisted in the establishment of a financial and business information reporting database, major incident reporting, as well as application review forms and operating procedures in recent years. Related reports: A complete interpretation of Taiwan’s cryptocurrency law, the “Virtual Asset Services Act”: What does it mean to investors? The exchange entered the licensing system and the conditions for stablecoin issuers were finalized. The OTC Buying Center held a virtual asset forum on 11/11, and Bito and MaiCoin gave lectures. Four financial holding companies in Taiwan are reported to be interested in acquiring VASP exchanges. MaiCoin and MaiCoin are both on the list; Fubon and Commonwealth Bank are the first to take positions. Bito and Wangdao Bank launched Taiwan's first enterprise-level stablecoin settlement pilot plan. Binance has been placed on the warning list by the Taiwan VASP Association: it has not completed anti-virus registration and is not allowed to operate or advertise in Taiwan. This article was first published in BlockTempo "Dongqu Trend - the most influential blockchain news media".