Taiwan financial watchdog to monitor digital assets but not NFTs
Taiwan’s financial watchdog is set to become the official digital currency regulator under upcoming legislation.
Taiwan has adopted a wait-and-see approach to digital asset regulations for years, despite the rapid growth in Bitcoin adoption in recent years. However, as Bloomberg reports, the Financial Supervisory Commission (FSC) will grant jurisdiction over the industry before the end of March.
FSC Chairman Huang Tien-mu confirmed the move to lawmakers on March 20 during a hearing on banking industry stability amid the collapse of three US banks.
By coming under the FSC’s jurisdiction, digital assets will now be subject to strict anti-money laundering requirements, the only major initial change. However, Huang rejected proposals for stand-alone legislation for the sector, saying it is too early to discuss Bitcoin regulations.
However, FSC’s supervision will not cover non-fungible tokens (NFT). According to local media reports, Huang believes that NFTs are a growing asset class with broad implications.
Wayne Huang, the founder of Taiwanese blockchain banking platform XREX agrees, saying the watchdog needs more time to formulate NFT regulations.
“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,” said he to an outlet.
Taiwan has seen an increase in Bitcoin adoption in recent years. In the first half of 2022, trading volumes increased by 30%. This adoption has increased despite the strict anti-Bitcoin stance that mainland China has taken over the years. The East Asian country, which dominates the global semiconductor manufacturing industry, has licensed 24 digital asset exchanges.
The new regulatory structure has been met with mixed reception. Huang, the XREX founder, welcomed the FSC as the industry’s watchdog, and urged it to work with industry stakeholders to develop a possible regulatory framework.
Others such as Alex Liu, CEO of Taiwan’s largest exchange Maicoin, believe the FSC is not best equipped to oversee the sector. He says the newly created Ministry of Digital Affairs (MODA) should have been charged with overseeing Bitcoin. This proposal was opposed based on the limited experience of the new ministry, an argument Liu rejected.
“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 Guided Energy Weapons?” he posed.
According to Bloomberg, Binance is already rallying other local exchanges to push the FSC for lenient rules. In a paper advocating for new laws, Binance argued that other regulators who have tried to apply existing regulations to digital assets “experienced great difficulties as the rules lacked clarity and made it very confusing for business operators, authorities and customers.”
See: Buzzmint Elevating NFTs
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