Title: 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, aiming to strengthen the protection of customer rights on domestic virtual asset platforms. Yesterday (3rd), the Finance Committee convened a public hearing, chaired by legislator Luo Mingcai, inviting representatives from the FSC, virtual currency operators, as well as relevant experts and scholars, to discuss the upcoming research report on the Virtual Asset Special Law and future policy directions.
Currently, the Taiwanese government follows a gradual approach, focusing on enhancing self-regulation among industry players. Taking the Anti-Money Laundering Act as a foundation, the FSC has referred to regulations from the European Union, Japan, South Korea, and other countries to issue the “Guidelines for Managing Virtual Asset Platforms and Trading Businesses (VASP).” Deputy Director Gao Jingping stated that they expect to complete the outsourced research report by the end of September this year, incorporating the latest international legislative experiences to establish a comprehensive regulatory framework.
Legislator Luo Mingcai mentioned that a draft of the special law is expected to be available by the end of the year. However, progress has been relatively slow, with only six people dedicated to researching the law, and it remains unclear when the law will be finalized. Luo Mingcai also revealed that internal discussions are underway regarding the possibility of establishing a Virtual Asset Management Bureau.
During his first interpellation on the 22nd, the newly appointed FSC Chairman, Peng Chin-lung, mentioned that the FSC has outsourced research on the special law and expects to decide whether to enact it by the end of this year. If the decision is made to proceed with the special law, the legislative framework could be proposed as early as the first half of next year.
Peng Chin-lung also emphasized that although Taiwan currently lacks a specific cryptocurrency law, the Republic of China Virtual Currency (VASP) Business Association will be established by the end of June. The association will formulate self-regulatory norms.
Further Reading:
Taiwan’s “Virtual Currency Association” Prepares for Establishment! XREX’s Hsiao Hui-tsung to Serve as Chairman, First Conference to be Held in June
What do industry players think?
Chen Ming-hui, Chief Operating Officer of MaiCoin, expressed strong support for the current “gradual” approach to legislation. They also suggested introducing specialized agencies for management and implementing tiered regulation before enacting the law. This would help determine business classifications and scopes, reducing communication costs while enabling professional management with supporting measures.
Furthermore, Chen Ming-hui proposed that the special law should consider including derivative financial products such as ETFs, options, and perpetual contracts. Clear levels, capital requirements, and shareholder structures should be outlined for specific business scales. This would allow industry players to continue operating and developing within a compliant environment.
Hsiao Hui-tsung, Co-founder and Chief Revenue Officer of XREX Exchange, pointed out that the current focus of cryptocurrency industry regulation in Taiwan is not solely on combating fraud. The most urgent task is to establish an industry-wide platform for anti-money laundering and fraud prevention, along with a complete upstream and downstream industry chain.
Hsiao Hui-tsung also added that the Taiwan Cryptocurrency Association will be officially established on June 13th. Subsequently, discussions and confirmations will take place among multiple industry players and the association’s chief advisor regarding the content of self-regulatory norms.