Taiwan Crypto Firms Establish Association Ahead of Regulatory Framework
Ahead of Taiwan’s upcoming regulatory framework for cryptocurrencies, nine major crypto firms, including MaiCoin, BitoGroup, and ACE, have announced plans to form an industry association. The Financial Supervisory Commission (FSC) is expected to release guidelines on crypto trading and payments by the end of September.
Taiwan’s Regulatory Guidelines
The FSC has already mandated that Virtual Asset Services Providers (VASPs) comply with the country’s anti-money laundering regulations. However, there are still other concerns unique to the crypto industry that need to be addressed. The proposed guidelines aim to introduce a comprehensive set of rules inspired by Hong Kong’s VASP licensing framework.
These guidelines prioritize consumer protection and propose measures such as hot and cold wallet ratios for customer deposits with crypto exchanges to ensure fund safety. Additionally, they suggest mandatory insurance against user losses to enhance consumer confidence.
Restrictions and Stabilization Measures
The FSC’s guidelines also seek to restrict offshore crypto exchanges from operating onshore without proper compliance registration. This ensures that all players in Taiwan’s crypto market adhere to the same standards. Furthermore, the guidelines propose a ban on stablecoins tied to the Taiwanese dollar and restrictions on foreign exchange advertising within the country. These measures aim to stabilize the financial system and prevent consumers from being misled by deceptive advertising.
A Commitment to Legitimacy
The FSC’s approach aligns with global trends in crypto regulation, emphasizing transparency and consumer protection. The ministry of Economic Affairs has drafted an amendment to existing legislation, creating a specific category for digital asset services. The nine crypto firms forming the industry association have established a working group led by Winston Hsiao, XREX’s co-founder, to develop self-supervisory rules based on the FSC’s guidelines.
Hot Take: A New Era for Taiwan’s Crypto Sector
The establishment of the industry association and the imminent release of the FSC’s guidelines mark a significant step forward for Taiwan’s crypto sector. The association and regulatory framework aim to provide legitimacy, oversight, and a clear path for growth, ultimately building public trust in the industry.
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