The Financial Supervisory Commission (FSC) in #Taiwan is set to become the regulator for cryptocurrency with the introduction of special legislation. Huang Tien-mu, the head of the FSC, confirmed this during a hearing about global banking stability.

The industry is welcoming the news as it believes that regulation will help it to grow. Wayne Huang, CEO of XREX, said that the next step would be for the virtual asset service provider industry to work with the #FSC to define regulatory operations.

One of the first steps in this collaboration is to form an industry self-regulatory body to help develop a set of rules. However, the FSC won't be regulating non-fungible tokens (NFTs) as they are still emerging as an asset class, and it's too early to regulate them. Taiwan has two financial regulators, the Central #Bank and the FSC, with the latter having a broad remit over banking regulation, securities and futures, and anti-money laundering.

Taiwan has historically taken a hands-off approach to #cryptocurrency regulation, only regulating the asset class under the framework of controlling money laundering. However, the collapse of FTX, a popular cryptocurrency exchange, added a sense of urgency to Taiwan's regulatory push.

Authorities approved 24 crypto platforms under the island's AML compliance system last September. The introduction of the new legislation is expected to strike a balance between experimentation and investor protection.

An initial framework for the law is expected by June, with an initial draft for later this year.

Taiwan's recent approval of stringent regulations targeting cryptocurrency businesses reflects a proactive stance in managing the dynamic digital asset landscape. These measures aim to enhance transparency, accountability, and security within the burgeoning industry while mitigating risks associated with illicit financial activities.
Extending Regulatory Reach Beyond Borders
The scope of Taiwan's regulatory framework extends beyond its borders, impacting businesses and individuals providing virtual asset services or third-party payment services to Taiwanese citizens. Compliance with Taiwan's company law, AML measures, and registration requirements is mandatory for entities operating outside the country, underscoring the authorities' commitment to maintaining regulatory integrity.
Path to Compliance and Accountability
With an estimated 60 to 70 cryptocurrency businesses in Taiwan, the regulatory landscape is poised for transformation. All businesses will be required to declare and undergo comprehensive reviews, ensuring adherence to AML standards and regulatory guidelines. The impending establishment of a cryptocurrency business association will provide additional oversight and support, fostering a culture of compliance and accountability.
Strengthening Internal Controls for Enhanced Security
To bolster internal control mechanisms, cryptocurrency businesses will enlist the expertise of accountants. This collaborative effort aims to fortify compliance with regulatory standards, safeguarding against potential risks and enhancing the overall integrity of the financial system.
A Proactive Approach to Consumer Protection
Taiwan's proactive measures signify a commitment to protecting investors and consumers while fostering innovation in the digital asset market. By imposing stringent regulations, the authorities seek to instill confidence among stakeholders, ensuring the long-term sustainability and integrity of the cryptocurrency ecosystem.
Toward a Mature and Responsible Digital Asset Market
Taiwan's adoption of stricter regulations marks a significant milestone in the evolution of its digital asset market. As global cryptocurrency regulation continues to evolve, Taiwan's proactive approach serves as a model for fostering responsible growth while prioritizing consumer protection and financial integrity.

#Taiwan #BitEagleNews

Taiwan is set to establish a regulatory framework for exchanges and cryptocurrencies, according to a report by Central News Agency (CNA). The Financial Supervisory Commission will be responsible for managing the industry, first through self-regulation with reference to international norms, and later through a special law. This comes after Taiwan investors lost heavily in the FTX Crash, and the government wants to prevent similar incidents from occurring in the country.

With the overall market value of cryptocurrencies exceeding $1 trillion, the government is keen to regulate the industry to ensure investor protection. Other countries, such as the European Union, Singapore, Japan, South Korea, and Israel, have already established financial regulators to oversee cryptocurrencies. Taiwan will follow suit, with the Financial Supervisory Commission taking on the role.

The government plans to adopt a phased approach to regulation, with the industry first self-regulating according to international norms. The Financial Supervisory Commission will continue to gather information on international trends while studying the best regulatory approaches. A special law for cryptocurrencies is also in the works.

Once a regulatory framework is established, the Financial Supervisory Commission will set principles and guidelines for the industry. Industry associations will then develop self-regulation codes to ensure internal control points are established, such as rules for asset segregation, wallet management, and product listings.

The government plans to submit the regulatory framework to the Executive Yuan for approval soon, with the announcement expected by the end of March or the beginning of April. However, it is worth noting that cryptocurrencies come in a wide range of forms, and not all can be easily defined and regulated by a single government agency. For example, non-fungible tokens (NFTs) may be difficult for the Financial Supervisory Commission to value. Therefore, the government is still working on how to assign regulatory responsibility for different forms of cryptocurrencies.

Overall, the establishment of a regulatory framework for exchanges and cryptocurrencies is a significant step for Taiwan in managing this fast-growing industry. It should help protect investors while promoting innovation and growth in the sector.

#Taiwan #nftcommunity #crypto2023 #cryptoregulation #azcoinnews

This article was republished from azcoinnews.com