Taiwan aims for crypto law by November.
Taiwan aims for crypto law by November.
Taiwan Aims to Regulate Crypto with Special Law
Lawmakers in Taiwan are taking steps to regulate the cryptocurrency industry by drafting a special law. The intent is to have a first draft of the law ready by the end of November 2023, according to a report from The Block. Yung-Chang Chiang, an official in the Legislative Yuan of Taiwan, has emphasized the necessity of this law in order to regulate crypto-related businesses. His concern stems from the increasing activity in offshore markets and the desire to avoid “regulatory arbitrage.”
Chiang recognizes that crypto assets are different from traditional financial products and require a unique framework for governance. To address this, he held a public hearing in the Taiwanese parliament on October 6th. The hearing included stakeholders such as digital asset service providers, academics, and industry experts who discussed the draft proposal.
The move to regulate the cryptocurrency industry in Taiwan follows the release of guidelines by Taiwan’s Financial Supervisory Commission (FSC) on September 26th. These guidelines aim to improve investor protections in the cryptocurrency space. They cover various aspects of the industry, including the separation of assets held by exchanges from those of customers. The guidelines also include mechanisms for reviewing the listing and delisting of digital assets, ensuring transparency and accountability.
Furthermore, the guidelines state that foreign virtual asset service providers cannot offer their services in Taiwan without obtaining the necessary approvals from local regulatory authorities. This requirement aims to protect investors and maintain regulatory control over the cryptocurrency industry within the country.
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In response to these developments, major cryptocurrency exchanges operating in Taiwan have formed an association to advance industry interests. This collaborative effort indicates a desire among industry players to work towards a regulated and responsible cryptocurrency market in Taiwan.
The introduction of a special law dedicated to regulating the crypto industry in Taiwan is a significant step forward. It highlights the recognition by lawmakers that cryptocurrencies have unique characteristics that require tailored regulation. By establishing clear legal frameworks and guidelines, Taiwan aims to foster a secure and transparent environment for cryptocurrency businesses and investors.
Implementing a special law for the crypto industry will help address concerns related to regulatory arbitrage. This term refers to the practice of taking advantage of discrepancies in regulatory frameworks across different jurisdictions to engage in activities that might be considered illicit or unethical elsewhere. By having a specific legal framework for cryptocurrencies, Taiwan can ensure that businesses operate within clear boundaries and that investors are better protected.
The draft proposal and subsequent law will also contribute to the global conversation surrounding blockchain and crypto regulation. As different countries grapple with how to regulate this emerging industry, Taiwan’s approach can serve as a model for others to learn from. By actively engaging stakeholders and experts in the drafting process, Taiwan is demonstrating its commitment to responsible regulation that balances innovation and investor protection.
In summary, Taiwan’s move to draft a special law for the cryptocurrency industry is a significant development in the global blockchain landscape. It reflects the growing recognition of the need for tailored regulation for this unique asset class. By engaging industry stakeholders and experts in the process and implementing clear guidelines, Taiwan aims to create a secure and transparent environment for cryptocurrency businesses and investors. This step will not only benefit Taiwan but will also contribute to the ongoing global discussion on blockchain regulation.