Taiwan Proposes Draft Crypto Act for Regulation of Crypto Assets
Taiwan has taken a step towards regulating crypto assets with the proposal of a draft crypto act. The proposal has passed the first reading at the Legislative Yuan, Taiwan’s parliament. The aim is to establish a regulatory framework for the virtual asset industry.
Yung-Chang Chiang, a member of the Legislative Yuan who jointly proposed the special act, stated that discussions on the regulatory framework have progressed to the next stage. Chiang hopes that the Financial Supervisory Commission (FSC) will also submit its version of a draft bill to further consolidate consensus.
The FSC had previously released guidelines for the crypto sector to form self-supervisory rules through a potential industry association. However, without legal enforceability, these measures were insufficient.
Importance of the Special Law
The proposed special law would require all crypto platforms operating in Taiwan to apply for a permit. If they fail to do so, regulators would have the authority to order them to cease operations. This law grants regulatory authorities the power to impose administrative penalties on operators who violate self-regulation rules.
Without this special law, regulators lack the ability to enforce penalties, as highlighted by Chiang during a parliament hearing earlier this month.
Current State of Regulation in Taiwan
Currently, virtual asset service providers in Taiwan must comply with anti-money laundering laws introduced by the FSC in July 2021. However, apart from these requirements, the crypto industry remains largely unregulated in Taiwan.
Hot Take: Taiwan Takes Steps Towards Comprehensive Crypto Regulation
Taiwan’s proposal for a draft crypto act marks an important development in the country’s efforts to regulate the virtual asset industry. By introducing a special law, Taiwan aims to establish a regulatory framework and enforce penalties for non-compliance. This move demonstrates Taiwan’s commitment to addressing the challenges and risks associated with cryptocurrencies while fostering a secure and transparent crypto ecosystem. The next stages of discussion and the submission of the FSC’s draft bill will be crucial in further shaping the regulatory landscape for crypto assets in Taiwan.
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