For years, a common misconception has circulated: that cryptocurrencies in Taiwan operate in a legal gray area with no oversight. This couldn’t be further from the truth.
In reality, Taiwan already has over 80% of crypto activities covered under existing laws. The remaining gap—the so-called “last puzzle piece”—is not a void of regulation, but rather the formal assignment of regulatory authority for non-financial crypto services. And now, with the establishment of the Ministry of Digital Affairs (MODA), Taiwan stands at a pivotal moment to complete this framework and step confidently into the future of blockchain, Web3, and digital innovation.
👉 Discover how Taiwan is shaping its digital future with forward-thinking crypto policies.
The Ministry of Digital Affairs: A Catalyst for Change
Launched on August 27, 2022, the Ministry of Digital Affairs—affectionately dubbed "mòda" (motor) by Minister Audrey Tang—aims to accelerate Taiwan’s digital transformation across government and industry. While MODA does not oversee licensed financial institutions such as banks or insurance companies, it plays a crucial role in shaping the broader digital economy.
Under MODA, the Digital Industry Agency now manages key areas directly relevant to cryptocurrency and metaverse development:
- Policy Planning Group: Responsible for drafting and revising regulations related to digital economy industries.
- Emerging Cross-domain & Digital Services Groups: Focus on planning and executing strategies for emerging tech sectors, including software, information services, and digital platforms.
This structure positions MODA not as a financial regulator, but as a strategic driver of digital innovation—setting policy direction, proposing legal reforms, and managing non-licensed digital services like online transaction contracts and consumer protections in digital marketplaces.
Where Regulation Stands Today
Crypto-related activities in Taiwan are already subject to multiple layers of legal oversight, depending on their nature:
- Banking Law: Applies when platforms engage in deposit-taking or fund-raising from the public.
- Securities and Exchange Act: Covers security-token offerings (STOs) and tokenized assets deemed securities.
- Futures Trading Act: Regulates crypto derivatives like futures, options, and margin trading.
- Anti-Money Laundering (AML) Act: Requires virtual asset service providers (VASPs) to implement KYC procedures and report suspicious transactions.
These areas fall under the jurisdiction of the Financial Supervisory Commission (FSC), ensuring high-intensity supervision where financial risk is significant.
However, there remains one critical gap: non-financial crypto services, such as peer-to-peer trading platforms, wallet providers, NFT marketplaces, and decentralized exchanges that don’t involve lending or securities. These operate more like digital commerce than finance—and currently lack a designated regulatory home.
This is the final missing piece.
A Four-Pillar Framework for Crypto Oversight
To address this gap, a comprehensive regulatory model can be built around four clear pillars:
1. Licensed Financial Activities – FSC Oversight
Any crypto service involving financial instruments—such as derivatives, security tokens, or public fundraising—should remain under strict FSC supervision. This ensures investor protection and systemic stability.
2. Anti-Money Laundering & Counter-Terrorist Financing
AML/CFT compliance must apply across the entire crypto ecosystem. The FSC and Ministry of Justice should continue joint oversight to prevent illicit use of digital assets.
3. Non-Licensed Digital Services – MODA & MOEA Leadership
For platforms offering custodial wallets, trading matching, or NFT sales without financial intermediation, regulatory responsibility should shift to MODA’s Digital Industry Agency, possibly in collaboration with the Ministry of Economic Affairs (MOEA). Their focus would be on:
- Consumer rights protection
- Standardized service agreements
- Industry self-regulation through trade associations
- Cybersecurity and platform integrity
This approach separates financial risk from digital service governance—ensuring smart, proportionate regulation.
4. National Strategy & Legal Roadmap
MODA should lead the creation of a National Crypto and Metaverse White Paper, outlining long-term vision, legal reform proposals, and cross-ministerial coordination. This document would serve as Taiwan’s blueprint for becoming a global hub for Web3 innovation.
👉 Explore how nations are building crypto-ready economies—and where Taiwan fits in.
Why Now Is the Time
Despite market downturns, we are still in the early innings of blockchain adoption. At the same time, risks are rising:
- Price volatility continues to impact retail investors.
- Scams and fraud using crypto assets are increasingly sophisticated.
- Regulatory uncertainty deters institutional participation.
The tools and institutions are now in place. With MODA operational and AML frameworks enforced, Taiwan has all the components needed—except formal clarity on who governs non-financial crypto platforms.
Completing this puzzle isn’t just about control—it’s about enabling innovation while protecting users. It’s about positioning Taiwan as a leader in digital trust and technological sovereignty.
Frequently Asked Questions (FAQ)
Q: Does Taiwan currently regulate cryptocurrency at all?
A: Yes. Over 80% of crypto activities are already regulated under banking, securities, futures, and anti-money laundering laws—primarily overseen by the Financial Supervisory Commission.
Q: Who will regulate crypto exchanges in Taiwan?
A: Exchanges offering financial products like derivatives or security tokens fall under FSC regulation. For general trading platforms without financial functions, MODA or MOEA may become the overseeing body.
Q: Is it legal to buy crypto in Taiwan?
A: Yes. Buying and holding cryptocurrency is legal. However, regulated platforms must comply with AML/KYC rules.
Q: What is the role of the Ministry of Digital Affairs in crypto regulation?
A: MODA won’t issue financial licenses but will shape digital policy, propose legal reforms, and potentially oversee non-financial crypto services like digital wallets and NFT platforms.
Q: Are security token offerings (STOs) allowed in Taiwan?
A: Yes, STOs are permitted if they comply with the Securities and Exchange Act and receive approval from the FSC.
Q: How does Taiwan prevent crypto-related crimes?
A: Through strict AML/CFT enforcement requiring VASPs to verify user identities and report suspicious transactions to authorities.
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Final Thoughts
We’re no longer asking if Taiwan should regulate cryptocurrency—we’re at the stage of finalizing how. With most legal foundations already laid and a dedicated digital ministry in place, the path forward is clear.
By adopting a risk-based, sector-specific approach—where financial risks go to the FSC and digital service governance goes to MODA—Taiwan can build a balanced, future-ready framework.
The final puzzle piece isn’t legislation; it’s leadership. And with the right decisions today, Taiwan can emerge not just as a compliant jurisdiction—but as a global innovator in blockchain technology, Web3 infrastructure, and digital consumer protection.
The time to act is now.
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