Virtual Asset Special Law to be Introduced as Early as Next Year
The Financial Supervisory Commission (FSC) is set to release “Cryptocurrency Regulatory Guidelines” in September 2023, strengthening the protection of customer rights on domestic virtual asset platforms. Yesterday (3rd), the Finance Committee convened a public hearing, chaired by committee member Luo Mingcai, to discuss the upcoming research report on the Virtual Asset Special Law and future policy directions, with the participation of the FSC, virtual currency operators, and relevant experts and scholars.
Currently, the Taiwanese government adheres to a gradual approach to strengthen self-regulation among industry players, based on the Anti-Money Laundering Act and referencing regulations from the European Union, Japan, South Korea, and other countries, by issuing the “Guidelines for Managing Virtual Asset Platforms and Trading Businesses (VASP)”. Deputy Director Gao Jingping stated that it is expected to complete the outsourced research report by the end of September this year and incorporate the latest international legislative experiences to establish a comprehensive regulatory framework.
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Luo Mingcai’s Office
Luo Mingcai stated that a draft of the special law will be available by the end of the year, but progress is currently quite slow, with only six people dedicated to researching the special law, and it is still unclear when the law will be introduced next year. Luo Mingcai also revealed that internal discussions are currently underway regarding the possibility of establishing a Virtual Asset Management Bureau.
During the first round of questioning on June 22, the newly appointed FSC Chairman Peng Chin-Long also mentioned that the FSC has outsourced research on the special law and is expected to decide whether to enact the law by the end of this year. If the law is to be enacted, the legislative framework is expected to be proposed as early as the first half of next year.
Peng Chin-Long also emphasized that although Taiwan does not currently have a cryptocurrency law, the Republic of China Virtual Currency (VASP) Chamber of Commerce will be established by the end of June, and self-regulatory norms will be formulated by the chamber.
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Luo Mingcai’s Office
Industry Perspectives:
MaiCoin’s Chief Operating Officer Chen Ming-Hui stated that MaiCoin has always been supportive of the current “gradual approach” to legislation and suggests that before introducing a specific law, a dedicated agency should be established to oversee and implement tiered management, clarifying business categories and scope to reduce communication costs, and enabling professional management with supporting measures.
Additionally, Chen Ming-Hui suggests that the special law should consider incorporating derivative financial product services such as ETFs, options, and perpetual contracts, and specify levels, capital requirements, and shareholder structures for clear business scales. This would allow industry players to continue to operate and develop in a compliant environment.
XREX Exchange Co-founder and Chief Revenue Officer Hsiao Hui-Zong also pointed out that the current focus of regulation in Taiwan’s cryptocurrency industry is not on combating fraud. The most urgent priority is to establish an industry-wide platform for anti-money laundering and fraud prevention, as well as to establish a complete upstream and downstream industry chain.
Hsiao Hui-Zong added that the Taiwan Cryptocurrency Association will be officially established on June 13, and subsequent discussions and confirmations will be conducted among multiple industry players and the chief advisor regarding the content of self-regulatory norms.