Taiwan Boosts Crypto Regulation with New Crypto Bill
- Taiwanese financial regulators have presented a new cryptocurrency industry regulatory bill.
- The bill will provide proper supervision and assistance to virtual asset operators and users within the region.
- Virtual asset providers will be required to adhere to new compliance standards.
As more nations and jurisdictions across the globe increasingly recognize the vast potential of blockchain and cryptocurrencies, a notable shift in focus has been prompted toward robust regulation. Among these pioneers, Taiwan has emerged as a proactive player, taking substantial steps to regulate the crypto asset class with a progressive outlook.
To establish “a good financial order in the virtual asset industry,” the Taiwanese legislative parliament has passed a new cryptocurrency bill.
Taiwan Special Cryptocurrency Law
On October 23rd, Taiwan’s legislative body, the Legislative Yuan, formally introduced the “Virtual Asset Management Regulations ” bill for its inaugural parliamentary reading.
The bill, proposed by 17 Taiwanese legislative members on September 18th, 2023, will establish a comprehensive framework for the operation and development of all virtual asset operators within the Taiwanese cryptocurrency industry.
It further emphasized the importance of customer protection in the cryptocurrency industry. In the wake of the collapse of entities like FTX and Terra, the legislators emphasized safeguarding the interests and rights of virtual asset users, mandating necessary compliance measures for virtual asset providers.
Compliance Guidelines and Consequences
While Taiwan’s regulatory authority, the Financial Supervisory Commission (FSC), had initially introduced a framework to guide the industry, entities operating within the Taiwanese crypto market will need to take note of new crucial guidelines.
All virtual asset businesses must join an industry association before they can operate, and businesses with certain level scales must apply for permission from the designated competent authority within six months of the enforcement of the bill.
The bill requires crypto exchange operators to commission periodic reports from accountants about their operations and asset management. Furthermore, they must allow regulatory authorities, such as the Financial Supervisory Commission (FSC), to conduct routine inspections of their internal control and audit systems.
Virtual asset providers within Taiwan must also establish review standards and procedures for adding or removing virtual assets from their platforms. Additionally, they are expected to adhere to the industry’s client asset separation regulations, which require customer funds to be separated from business operating capital.
Regulators have the authority to establish asset ratio standards. Failure to comply with these regulations can result in significant consequences for industry participants, including the potential revocation of the virtual asset business license and fines ranging from TWD 2 to 20 million.
On the Flipside
- Taiwan’s virtual asset management bill does not adopt a stringent approach to stablecoins, contrasting neighboring Asian regions such as Hong Kong .
- The bill’s second reading timeline is uncertain, and the final approval and implementation authority rests with the Executive Yuan.
- Hong Kong implements new investor test to reverse anti-crypto stance after major regulatory crackdown.
Why This Matters
The virtual asset management bill underscores Taiwan’s commitment to industry stability, and its approval will provide much-needed stability and credibility within the region’s cryptocurrency industry. It could also serve as a model for other countries seeking to regulate their cryptocurrency industries.
Leading stablecoin issuer Circle leverages Taiwan’s favorable regulatory stance in a new partnership. Read more:
Circle’s Points-to-Crypto Feature To Enhance Web3 In Taiwan
Read here to dive deeper into crypto regulation in Hong Kong:
Taiwan Regulators to Set New Measures for Virtual Assets Providers
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Today's Fear and Greed Index fell slightly to 93, and the level is still extremely greedy
Breaking Down the Best: Why Qubetics, Ethereum, and Chainlink Are Leading November’s Crypto Scene
Court extends pretrial detention of Tornado Cash developer Pertsev