Taiwan intends to regulate cryptocurrency via the Financial Supervision and Administration Committee (FSC) or the newly created Ministry of Digital Affairs (MODA).
Taiwan intends to regulate cryptocurrencies via special laws, and the Financial Supervisory Commission (FSC) will oversee the industry’s growth. The Chairman of the FSC, Huang Tien-mu, verified this at a parliamentary hearing on global financial stability.
Cryptocurrency sector participants in Taiwan applauded the news. Wayne Huang, co-founder, and chief executive officer of XREX, thinks the market will expand with adequate regulation.
According to the new regulations, crypto exchanges must get licenses from the relevant authorities. Meanwhile, discussions have begun to determine how effectively to govern platforms for trading virtual assets. A preliminary framework for the bill is anticipated by June, followed by a preliminary text later this year.
The central bank supervises foreign exchange rules and determines the nation’s monetary policy. In contrast, the FSC has a comprehensive mandate that includes banking supervision, securities, Futures, and anti-money laundering (AML).
As a new digital asset technology, some Taiwanese politicians wanted the newly-established Ministry of Digital Affairs (MODA) to be in charge of crypto regulation. Some claimed that the MODA is very young and inexperienced compared to the FSC.
The FSC is not interested in regulating non-fungible tokens (NFTs). Local Taiwan media reported Huang Tien-mu stated it is too early to control NFTs since they are still developing as an asset class.
Hong Kong wants to become a crypto center despite China’s restriction on crypto-related operations. Taiwan, which previously had a hands-off attitude to cryptocurrency regulation, now follows Hong Kong’s example.
The FTX disaster of the previous year might have prompted authorities to expedite the development of appropriate legislation. With the insolvency of the exchange run by Sam Bankman-Fried, Taiwanese customers were among the most hit, with a study claiming that they lost nearly $20 billion.
With the FTX crash, crypto assets also dropped. Bitcoin fell below $20,000 in mid-November, marking new lows for 2022.
Taiwanese crypto businesses are confident that the government would learn from Hong Kong’s regulatory experience and make efforts to foster innovation in crypto and blockchain by creating a favorable regulatory environment. Hong Kong might compete with other centers like Singapore and Dubai despite its crypto aspirations.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.