Taiwan’s crypto industry welcomes regulatory announcement
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Taiwan will soon have special legislation to regulate cryptocurrency, and its Financial Supervisory Commission will be in charge.
Huang Tien-mu confirmed this to lawmakers in Taiwan’s parliament during a hearing on global banking stability. Bloomberg originally reported that the FSC was to be announced as the regulator, citing sources in the legislature.
Wayne Huang, co-founder and CEO of XREX, welcomed the news and said the industry can only grow when it is regulated.
“Our next step will be for the virtual asset services industry to work with the FSC to define regulatory operations,” he said, saying one of the first steps is to form a self-regulatory body for the industry to help develop a set of rules .
Reports say the FSC will not regulate NFTs. Local Taiwan media quoted the FSC’s Huang as saying that as NFTs are still emerging as an asset class, it is premature to regulate them.
“Due to the extensibility and composability of NFTs, they can represent a wide range of things ranging from commercial products to raw materials to securities. Therefore, FSC probably needs more time to develop a proper set of guidelines for NFT classification,” adds Huang to XREX.
Taiwan has two financial regulators: the Central Bank of the Republic of China (Taiwan’s official name) and the FSC.
The central bank regulates monetary policy and currency regulations, while the FSC has a broad mandate over everything from banking regulation, securities and futures, to anti-money laundering.
“Finding the balance between experimentation and investor protection is the order of the day,” says Alex Liu, CEO of Maicoin.
Some in Taiwan’s parliament had called for the newly created Ministry of Digital Affairs (MODA) to be the chief crypto regulator, although others have said the ministry is relatively inexperienced in regulation compared to the FSC.
“Militaries use guns and bullets. Let’s say they started using laser weapons. Would you expect it to still fall under the Department of Defense or a new Department of Directed Energy Weapons?” Liu noted.
FTX pushed Taiwan to regulate
Historically, Taiwan has taken a hands-off approach to crypto regulation that only regulates the asset class within the framework of controlling money laundering.
Last September, authorities approved 24 crypto platforms under the island’s AML compliance system.
However, the collapse of FTX added a sense of urgency to Taiwan’s regulatory push, as Taiwanese were one of the biggest users of the exchange per capita, attracted by the relatively high interest rates on USD deposits compared to local banks.
A first framework for the law is expected by June, with a first draft later this year.
