Taiwan is gearing up to introduce a new set of digital currency laws in September 2024, according to a recent announcement by the Financial Supervisory Commission (FSC). This move aims to bolster the safety of digital asset investors and enhance the regulatory framework governing the digital asset markets.
Strengthening Investor Protections
Huang Tien-mu, the FSC Chairman, highlighted in a UDN news report on March 4 the importance of the upcoming draft bill. The legislation seeks to not only provide more effective regulations for digital asset markets but also to ensure the safety and security of investors. Huang warned of the potential fraud risks within the digital currency domain, indicating that stringent administrative penalties await those attempting to deceive investors.
Bridging Digital and Traditional Financial Systems
The FSC is also focusing on the implications of the growing interconnectedness between digital assets and the traditional financial system. With digital assets posing potential risks to the stability of the traditional financial framework, the commission plans to introduce laws aimed at safeguarding the legacy financial system from these emerging threats.
Legislative Developments and Industry Support
In October 2023, Taiwanese legislators brought forward the Virtual Asset Management Bill, targeting enhanced customer protection and stricter supervision of the cryptocurrency industry. The proposed penalties for operating without a license could range from two million Taiwanese dollars (approximately $60,000) to 20 million TWD ($600,000), showcasing the seriousness of these regulatory efforts.
Exploring Bitcoin ETFs and Foreign Regulations
The Taiwanese Chamber of Commerce is set to release a study on Bitcoin exchange-traded funds (ETFs) in April, signaling a growing interest in digital asset investment vehicles. Although Taiwan is considering the regulation of spot Bitcoin ETFs, Tien-mu cautioned investors about engaging with foreign crypto-based exchange-traded products, reinforcing the country’s stance against unapproved foreign virtual asset service providers (VASPs).
Crypto Industry’s Self-Regulation and Licensing Milestones
Following the establishment of a self-regulatory association by major Taiwanese cryptocurrency exchanges in September 2023, the industry has shown a commitment to supporting the crypto sector and cooperating with regulatory bodies. This collaborative effort includes key local exchanges like BitstreetX and Cathay Securities, the latter of which received the country’s first security token offering license in November 2023, allowing it to issue tokenized green bonds.
As Taiwan prepares to roll out its new digital currency laws in September, the focus remains on creating a secure and well-regulated digital asset environment that protects investors while embracing the potential of blockchain and cryptocurrency technologi
