Taiwan's Selective Banking Crypto Restrictions: What You Need to Know in 2025

3 September 2025

When you want to buy Bitcoin in Taiwan, you can’t just link your bank account like you would in the U.S. or Europe. That’s not because Taiwanese people don’t use crypto-it’s because the government made a deliberate choice to block banks from getting involved. This isn’t a ban on crypto. It’s a wall between traditional finance and digital assets. And it’s working-sort of.

Why Banks Can’t Touch Crypto in Taiwan

It started in 2013. Taiwan’s Financial Supervisory Commission (FSC) didn’t call Bitcoin money. They called it a “highly speculative virtual commodity.” That label mattered. It meant banks weren’t allowed to treat it like dollars or euros. By 2014, the FSC told every local bank: no Bitcoin exchanges, no crypto deposits, no crypto withdrawals. That rule stuck. And in 2022, they made it even tighter-credit cards couldn’t be used to buy crypto at all. Same rules as online gambling or stock trading. No exceptions.

This wasn’t about stopping people from owning crypto. It was about stopping banks from becoming the middleman. The FSC worried that if banks handled crypto transactions, they could get dragged into money laundering, fraud, or sudden market crashes. So they drew a line: you can own Bitcoin. You can trade it. But your bank account? Stay out of it.

How People Still Buy Crypto Without Banks

If banks won’t help, how do 2.3 million Taiwanese people own crypto? They find workarounds. Most use registered crypto exchanges like MaiCoin, which is the biggest local platform. These exchanges handle trading, but they can’t process direct bank transfers. So users turn to third-party payment processors, peer-to-peer (P2P) platforms, or even cash deposits at convenience stores.

Reddit threads from r/Taiwan show users swapping USDT for cash at 7-Eleven, then using that cash to fund their crypto wallets. Others use international exchanges like Binance or OKX that have registered under Taiwan’s new VASP rules. These platforms let users deposit via local e-wallets or bank-to-third-party transfers-but never directly from a bank account to the exchange.

It’s clunky. It’s slower. But it works. Daily trading volume in Taiwan still hits $200 million. Bitcoin and Ethereum make up 65% of that. And user growth? Up 15% year over year. The restrictions haven’t stopped adoption. They just moved it outside the banking system.

What Is a VASP? And Why It Matters

In January 2025, Taiwan made a big move: every crypto business had to register as a Virtual Asset Service Provider (VASP). Before that, compliance was optional. Now, if you’re running an exchange, wallet service, or crypto trading platform in Taiwan, you need government approval-or you face fines up to NT$5 million (about $155,900) and possible jail time.

As of late 2024, only 23 companies made it through the registration process. MaiCoin is the leader, handling $70 million in daily trades. They’re even planning to go public on Taiwan’s stock exchange-a first for a local crypto firm. But getting registered isn’t cheap. New companies spend NT$2-5 million just to set up AML systems, cybersecurity controls, and audit trails. The process takes 3 to 6 months.

These VASPs have to follow strict rules: keep user funds separate from company money, protect against hacks, verify every customer’s identity, and report suspicious activity. The FSC calls it “consumer protection with teeth.” Critics say it’s overkill. But the data shows fewer scams and more trust. Local review sites give registered exchanges an average 4.2/5 rating-higher than unregistered ones.

The Stablecoin Game Changer Coming in 2025

Taiwan isn’t just blocking crypto. It’s building its own version. In June 2025, the FSC will roll out rules for New Taiwan Dollar (TWD)-backed stablecoins. These won’t be USDT or USDC. They’ll be digital dollars issued by licensed financial institutions under government supervision.

This is a quiet revolution. For the first time, banks might be allowed to interact with digital assets-but only if those assets are tied to the TWD and approved by the central bank. Think of it like digital cash, but issued by a bank, not the government. It’s a way to bring crypto-like benefits (fast transfers, 24/7 access) without the volatility or anonymity risks.

The Central Bank of the Republic of China (Taiwan) has already tested the tech using its existing digital voucher system. If this works, it could be the first step toward a full Central Bank Digital Currency (CBDC). That would mean Taiwan’s next step isn’t lifting crypto restrictions-it’s replacing them with something better controlled.

Who Wins and Who Loses?

The system favors regulators and big players. Compliance-heavy firms like MaiCoin thrive because they’ve paid the price to play. Smaller startups? They struggle. Many can’t afford the $200,000 setup cost. Some have shut down. Others moved operations overseas.

Banking institutions win too. They stay clean. No exposure to crypto crashes. No chargebacks from disputed trades. No headlines about stolen funds. But they also lose out. They’re missing a growing market. While banks sit on the sidelines, fintech startups in Singapore and Hong Kong are building crypto-integrated services.

Regular users? They adapt. They’re not happy about the extra steps, but they’re not giving up. One user on a Taiwanese forum said: “I’d love to buy crypto with my bank app. But if I have to use P2P, I’ll use P2P. At least I know it’s safe.” That’s the trade-off: convenience for security.

What’s Next for Taiwan’s Crypto Scene?

Don’t expect banks to start accepting Bitcoin anytime soon. The FSC’s stance hasn’t softened. But the door is cracking open for regulated digital assets. The upcoming TWD stablecoin rules could be the first real change in over a decade.

Industry insiders believe this is a test run. If TWD-backed stablecoins work well-fast, secure, widely used-the government might allow banks to offer them as part of savings or payment apps. That would be a huge shift. But it won’t mean open access to Ethereum or Solana. The wall stays. Only government-approved digital money gets through.

For now, Taiwan’s model is unique: crypto is legal, but banking is off-limits. It’s not the most convenient system. But it’s one of the safest. And in a world full of crypto fraud and bank collapses, that might be exactly what Taiwan’s citizens want.