Taiwan to Propose New Digital Asset Regulations

The Financial Supervisory Commission (FSC) of Taiwan has announced plans to propose a new draft of digital asset regulations in September 2024, aiming to enhance regulations for digital asset markets and ensure investor safety. Huang Tien-mu, chairman of the FSC, highlighted the importance of effective regulations amidst the growing risks associated with digital currencies, emphasizing the need for strict penalties against fraudulent activities.

The upcoming draft bill seeks to address the increasing interconnection between digital assets and the traditional financial system, with a focus on safeguarding the stability of the legacy financial system from the risks posed by digital assets. Taiwanese legislators previously introduced the Virtual Asset Management Bill to parliament, aiming to provide better protection for customers and proper supervision of the industry. The bill proposes fines for unlicensed virtual asset service providers (VASPs) ranging from two million to 20 million Taiwanese dollars.

In addition to regulatory efforts, Taiwan’s Chamber of Commerce plans to release a study on Bitcoin exchange-traded funds (ETFs) in April, exploring the potential implications and regulatory considerations. While Taiwan is considering the acceptance of spot Bitcoin ETFs under its regulatory purview, caution is advised against investing in foreign crypto-based exchange-traded products.

The FSC has implemented rules prohibiting foreign VASPs from offering their services in Taiwan without obtaining necessary approvals from the regulator. These regulations were established following the formation of a self-regulatory association by major cryptocurrency exchanges in the country, demonstrating collaboration between industry players and regulators.

Furthermore, Taiwan’s FSC granted the country’s first security token offering license to Cathay Securities, enabling the issuance of tokenized green bonds worth $930,000 every six months.