Taiwan has taken a decisive step in the realm of cryptocurrency regulation. The Legislative Yuan, Taiwan’s parliamentary body, officially moved a draft proposal to regulate crypto assets to its next phase of deliberation, as revealed in their official records. Yung-Chang Chiang, one of the lawmakers behind this special act, offered key insights. Chiang explained that after successfully passing the first reading, the stage is now set for more in-depth discussions about the sector’s regulatory framework.
Moreover, the lawmaker expressed the desire for the Financial Supervisory Commission (FSC) to submit their own draft bill. This, he believes, would enable different sectors of society to consolidate consensus more efficiently during the legislative process.
Filling the legal void
Despite last month’s move by Taiwan’s FSC to release guidelines that would encourage the crypto sector to create self-supervisory rules, these guidelines lack legal enforcement power. According to Chiang, the proposed act would give regulatory authorities the legal capacity to impose administrative penalties on those who violate self-regulation rules. In the absence of such a law, regulators find themselves hamstrung, unable to issue penalties on rule-breaking operators.
The special crypto law, crafted by Chiang along with 16 other lawmakers, has straightforward but far-reaching requirements. Specifically, all cryptocurrency platforms operating within Taiwan’s jurisdiction would need to obtain a permit. Failure to do so would compel regulators to issue an order for them to cease operations. This signals Taiwan’s move toward creating a more secure and compliant environment for crypto operations.
However, it is important to note that the timeline for the second reading of this bill remains uncertain. Chiang’s office disclosed that it might not take place before the end of January 2024. This deadline coincides with the end of the current tenure for all lawmakers in Taiwan. Consequently, the window for passing this law during the current legislative session is narrowing.
Additionally, since July 2021, Taiwan has required virtual asset service providers to adhere to existing anti-money laundering regulations, as set forth by the FSC. But apart from that, the crypto industry in Taiwan remains largely unregulated.
Significantly, Taiwan’s latest legislative move indicates a growing awareness of the need for well-defined regulatory structures in the burgeoning crypto sector. While the road to regulation may be long, the draft proposal represents a major milestone. Hence, all eyes are on Taiwan as it moves to set legislative standards that could serve as a model for other nations grappling with the challenges and opportunities presented by digital assets.