Lawmakers in Taiwan are working on a special law to regulate cryptocurrency. According to a report from The Block, they are aiming to have a first draft of the law ready for parliament to review by the end of November 2023. Yung-Chang Chiang, an official in the Legislative Yuan of Taiwan, emphasized the importance of this law and its necessity in regulating crypto-related businesses.
The lawmakers in Taiwan are particularly concerned about the activities taking place in offshore markets and want to prevent regulatory arbitrage. Chiang believes that crypto assets are different from traditional financial products and therefore require a special law to govern them.
To gather input and discuss the draft proposal, Chiang organized a public hearing on October 6. The hearing included participation from digital asset service providers, academics, and other industry stakeholders.
This development follows the release of guidelines by Taiwan’s Financial Supervisory Commission on September 26. The guidelines aim to enhance investor protections in the cryptocurrency market. They include rules that cover various aspects of the industry, such as the separation of assets in exchanges’ treasury from those of customers, mechanisms for reviewing the listing and delisting of digital assets, and restrictions on foreign virtual asset service providers operating in Taiwan without necessary approvals.
In response to these regulations, major cryptocurrency exchanges operating in Taiwan formed an association on the same day. This association aims to advance the interests of the industry and ensure compliance with the new regulations.
The progress being made in Taiwan regarding cryptocurrency regulation is a significant step forward for the industry. With the introduction of a special law and the implementation of guidelines for investor protection, Taiwan aims to create a more transparent and secure environment for cryptocurrency businesses and investors.
As the draft proposal nears completion, it will be interesting to see how the lawmakers in Taiwan address the unique challenges and opportunities presented by the rapidly evolving world of cryptocurrencies. The special law could serve as a model for other countries seeking to regulate this emerging technology. By setting clear guidelines and regulations, Taiwan hopes to encourage responsible innovation and promote the growth of the cryptocurrency industry within its borders.
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