Lawmakers in Taiwan are working toward drafting a specialized crypto law by the end of November 2023 to address concerns related to offshore exchanges and ensure regulatory clarity in the cryptocurrency space.
Timetable for Draft Legislation
Yung-Chang Chiang, an official in Taiwan’s Legislative Yuan, revealed plans to have the initial draft of the crypto-focused legislation available for parliament review by the end of November, or potentially sooner. The objective is to create a legal framework that is tailored to the unique characteristics of cryptocurrencies and crypto-related businesses.
One of the driving forces behind this initiative is to address concerns about activities in offshore crypto markets, ultimately seeking to prevent “regulatory arbitrage.” Lawmakers in Taiwan recognize that cryptocurrencies are distinct from traditional financial products and believe that a dedicated law is necessary for their proper governance.
Public Hearing on Draft Proposal
On October 6th, Yung-Chang Chiang organized a public hearing in the Taiwanese parliament. The event brought together various stakeholders, including digital asset service providers, academics, and industry experts, to discuss the draft proposal for the upcoming crypto law.
Recent Regulatory Developments
Taiwan’s Financial Supervisory Commission (FSC) released guidelines on September 26th, aimed at enhancing investor protections in the cryptocurrency sector. These guidelines cover a wide range of aspects, including segregating assets held by exchanges from customer funds and establishing procedures for listing and delisting digital assets. They also emphasize that foreign virtual asset service providers must obtain the necessary approvals from local regulatory authorities to operate in Taiwan.
Industry Collaboration
On the same day the FSC issued its guidelines, major cryptocurrency exchanges operating in Taiwan came together to form an association. This association aims to advance the interests of the cryptocurrency industry in Taiwan and collaborate on issues related to regulation, compliance, and industry development.
In summary, Taiwan is actively working on a specialized crypto law to address concerns related to offshore exchanges and to establish a clear regulatory framework for the cryptocurrency sector. Recent regulatory developments and industry collaboration are indicative of the country’s commitment to fostering a secure and compliant cryptocurrency ecosystem.
