On October 25th, Taiwan’s legislators presented the Virtual Asset Management Bill to the Legislative Yuan, the nation’s unicameral parliament. The primary objective of this bill is to enhance customer protection and ensure effective oversight of the cryptocurrency industry.
📰Key Highlights of the Bill
The bill emphasizes the need for virtual asset service providers (VASPs) to segregate customer funds from the company’s operational funds. VASPs are mandated to establish robust internal control and audit mechanisms.
The bill encourages VASPs to become members of the local trade association. Interestingly, the bill does not necessitate stablecoin issuers to maintain a 1:1 reserve fund ratio and remains silent on algorithmic stablecoins. Specific advertising regulations for the industry will be determined by the designated authority.
Unlicensed VASPs could face fines ranging from 2 million Taiwanese dollars (approximately $60,000) to 20 million TWD (around $600,000). Existing companies in the market will be given a six-month grace period to secure a license once the bill is enacted.
📰Previous Regulatory Efforts
In September 2023, the Financial Supervisory Commission (FSC) of Taiwan unveiled guidelines for VASPs. These guidelines restrict foreign VASPs from offering their services in Taiwan without the requisite approvals from the FSC.
📰Industry’s Proactive Stance
In a commendable move, major cryptocurrency exchanges in Taiwan have come together to establish a self-regulatory body. On September 26th, prominent exchanges such as MaiCoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito collaborated to form the Taiwan Virtual Asset Platform and Transaction Business Association. This association aims to bolster the crypto sector and collaborate closely with regulatory authorities.
📰Conclusion
Taiwan’s proactive approach towards regulating the burgeoning cryptocurrency industry underscores its commitment to ensuring a safe and transparent environment for both investors and businesses. The introduction of the Virtual Asset Management Bill is a significant step in this direction, and its eventual enactment will shape the future of crypto in Taiwan.
