Taiwan’s financial watchdog expects to submit a draft bill on digital asset regulation later this year to protect consumers and the stability of the country’s financial sector.
Chairman Huang Tienmu said the Financial Supervisory Commission (FSC) would propose the bill in September. Huang appeared before parliament to address lawmakers’ concerns about digital assets, among topics that have raised questions about the FSC’s approach.
Huang told lawmakers that his agency has begun studying digital asset regulation proposals and that a preliminary study is expected to be completed by September.
He added that the FSC prioritizes investor protection and that future regulatory proposals will reflect this focus.
The FSC will first introduce a formal regime for virtual asset service providers (VASPs) in 2021, mandating the industry to comply with the country’s anti-money laundering regulations. However, this agency was confirmed as an official digital asset surveillance agency only in March last year.
In September, we published our first guidance for VASPs. Among the requirements was separation of platform and customer assets. Additionally, exchanges will be ordered to establish a transparent review mechanism for token listings and delistings, requiring them to publish a white paper detailing their operations. Overseas platforms must establish local subsidiaries to serve Taiwanese investors.
A month later, lawmakers submitted a virtual asset management bill to the National Assembly. Most of the regulations, from proper storage to asset segregation, were templates. The bill proposes fines of $60,000 to $600,000 for operating without a license.
In an interview with lawmakers this week, Huang acknowledged that digital assets are becoming increasingly popular.
It is intertwined with the existing financial system. It is therefore important to regulate the former and avoid posing risks to the latter.
But Huang downplayed digital assets, saying they had no intrinsic value.
“The emergence of Bitcoin has nothing to do with the real economy,” he told lawmakers.
He also warned investors about the volatility of digital assets, reminding them they could lose all their money and that his company can do little to protect them.
See: Digital currency regulation and the role of the BSV blockchain
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