Taiwan proactively seeks international input and expertise in shaping its regulatory framework for cryptocurrency-related businesses and companies. The Financial Supervisory Commission recently hosted a public hearing to formulate “Guiding Principles for the Management of Virtual Asset Platforms and Trading Businesses (VASP).”
The guidance under consideration comprises ten fundamental principles that will serve as a foundation for regulating the cryptocurrency sector in Taiwan. These principles include strengthening the oversight of virtual asset issuance, establishing a review mechanism for listing and delisting virtual assets, and differentiating between platform and customer assets. Additionally, the guidelines focus on enhancing transaction transparency, formulating contracts and advertising standards, and improving complaint resolution processes.
Furthermore, the proposed guidance aims to establish robust operational systems, bolster information security measures, enforce internal controls, and implement organizational review mechanisms. It also emphasizes the prohibition of illegal business solicitation involving foreign currency merchants.
These efforts align with the vision outlined by Huang Tianmu, Chairman of the Financial Supervisory Commission, who had previously emphasized the need for separating customer assets from platform assets, evaluating discontinued commodities, and enhancing investor protection when the Commission was entrusted with the responsibility of overseeing virtual assets by the Executive Yuan of Taiwan.
In March, the Financial Regulatory Commission disclosed its intentions to develop guiding principles for Virtual Asset Service Providers (VASP). It encouraged VASP-related associations to adopt self-regulatory standards and collaborate with government ministries in the future.
Notably, despite China’s ban on cryptocurrencies and crypto-related activities in 2021, Taiwan has been working to redefine the digital asset industry within its borders. Reports suggest that Taiwan Mobile Co., a government-licensed wireless service provider, is exploring potential investments in local cryptocurrency platforms, setting the stage for future partnerships. One of the potential strategic collaborations being considered is with XREX Inc., a financial institution based in Taipei that leverages blockchain technology.
Taiwan’s commitment to establishing a comprehensive regulatory framework for the cryptocurrency sector reflects its ambition to balance fostering innovation and ensuring consumer protection in the rapidly evolving digital asset landscape. Seeking input from global experts and stakeholders indicates Taiwan’s dedication to creating a robust and responsible cryptocurrency ecosystem.