In a move towards self-regulation ahead of anticipated government action, 24 leading cryptocurrency companies in Taiwan have joined forces to establish the Taiwan Virtual Asset Service Provider (VASP) Association. Announced on 13 June, 2024, this association aims to develop industry-wide standards for the country’s burgeoning digital asset sector.
While Taiwan already requires cryptocurrency service providers to comply with Anti-Money Laundering (AML) laws, as mandated by the Financial Supervisory Commission (FSC) since July 2021, the broader crypto industry remains largely unregulated. However, significant regulatory changes are expected in the coming months.
Last month, the Ministry of Justice proposed amendments to existing AML laws, necessitating both domestic and overseas crypto firms to register for AML compliance if they wish to operate in Taiwan. Failure to do so could result in imprisonment for up to two years. Additionally, the FSC plans to unveil a comprehensive framework for digital assets in September.
The VASP Association, led by BitoPro founder Titan Cheng as chair and XREX chief revenue officer Winston Hsiao as vice chair, will play a crucial role in shaping the future of Taiwan’s crypto industry. The association is committed to developing self-regulatory standards, collaborating with regulators, and promoting fair and effective regulations.
The VASP Association will establish best practices for VASPs to ensure consumer protection, combat financial crime, and foster a stable and transparent digital asset environment. Furthermore, the association plans to work closely with the Taiwanese government, including the Ministry of Justice and the FSC, to ensure compliance with upcoming regulations. The association also advocates for regulations that encourage innovation and responsible growth within the blockchain finance industry.
“The formation of the VASP Association is a significant step forward for Taiwan’s crypto industry,” said industry analyst Michael Chen. “By taking a proactive approach to self-regulation, VASPs are demonstrating their commitment to building a secure and trustworthy ecosystem for digital assets.”
This initiative by Taiwan is part of a broader trend of world governments increasingly adopting and integrating cryptocurrency into mainstream financial systems. As nations recognize the potential of digital assets to drive economic growth and financial innovation, regulatory frameworks are being established to ensure the responsible and secure use of these technologies. Taiwan’s proactive stance, through the establishment of the VASP Association, positions it as a leader in fostering a responsible and innovative digital asset market in Asia.
The collaborative efforts between the Taiwanese crypto industry and government regulators could serve as a model for other countries seeking to balance innovation with regulatory oversight, ultimately contributing to the global acceptance and mainstream adoption of cryptocurrency.
