- Taiwanese regulators have drawn up crypto-specific legislation in the country
- The potential framework comes five years after the country first took steps to regulate crypto
- The country’s financial regulator, the Financial Supervisory Commission, will present its draft version of the ordinance to the legislature
The Legislative Yuan in Taiwan has drawn up the country’s first cryptocurrency regulations with a draft proposal called the Virtual Asset Management Ordinance. The move, which has its roots in a 2018 decision to embrace the “huge opportunity” offered by the crypto sector, aligns with the global trend of exploring cryptocurrency regulations. Taiwan’s financial regulator, the Financial Supervisory Commission (FSC), will present its draft version to the legislature this year.
A Five-year Marathon
Taiwan’s crypto journey started in November 2018 when its government passed amendments to anti-money laundering legislation that removed the right to anonymity for cryptocurrency users in the country. The amendments formed part of an initiative to regulate cryptocurrency in the country and bring it in line with other financial assets rather than simply banning it outright.
Five years later, proposals to build a regulatory framework are taking shape, with Yung-Chang Chiang, a parliament member actively involved in proposing this ordinance, conveying that discussions surrounding the framework have progressed to the next stage following the initial reading of the bill. Chiang expressed optimism that the FSC would present its draft version to the legislature imminently, promoting a broader societal consensus during the review phase.
Amidst the ongoing global efforts to navigate the rapidly evolving digital asset landscape, events such as Benzinga’s Future of Digital Assets conference, scheduled for November 14, are playing a vital role in facilitating stakeholder insights and knowledge sharing.
FSC Wants Crypto to Self-regulate
Last month, Taiwan’s FSC encouraged the cryptocurrency sector to establish self-regulation rules through a potential industry association. Chiang, however, pointed out the limitations of these guidelines, particularly their lack of legal binding. He emphasized the necessity of a special law to grant regulatory authorities the power to impose administrative penalties on operators who violate self-regulation rules.
The proposed legislation, supported by Chiang and 16 other lawmakers, mandates that crypto platforms in Taiwan obtain a permit, the failure of which could result in regulators suspending their operations. The timeline for the bill’s second reading remains uncertain, but it may extend beyond January 2024, aligning with the conclusion of the present legislators’ tenure in Taiwan.
Currently, Taiwan requires virtual asset service providers to adhere to anti-money laundering regulations, a directive introduced by the FSC in July 2021.
