April 19, 2024
Taiwan Takes Steps to Ensure Enhanced Customer Protection in Virtual Asset Industry
Latest Cryptocurrency News

Taiwan Introduces Virtual Asset Management Bill for Enhanced Industry Oversight

On October 25, members of the Taiwanese legislative body introduced the Virtual Asset Management Bill to the unicameral parliament, known as the Legislative Yuan. Spanning 30 pages, the bill exhibits a measured approach to its expectations for the industry. It proposes practical responsibilities for virtual asset service providers (VASPs), including the segregation of customer funds from the company’s reserved funds, the implementation of an internal control and audit system, and participation in the local trade association.

The primary goal of this bill is to ensure enhanced protection for customers and to establish effective supervision of the virtual asset industry.

Nevertheless, the bill currently does not mandate that stablecoin issuers maintain a 1:1 reserve fund ratio, and it makes no reference to algorithmic stablecoins. In terms of marketing practices, the specific regulations for advertising will be determined by the competent authority.

The bill also introduces penalties for unlicensed VASPs, setting fines at a minimum of 2 million Taiwanese dollars (approximately $60,000) and a maximum of 20 million TWD ($600,000). Existing companies operating in the Taiwanese market will be given a six-month window to obtain a license once the bill becomes effective.

In September 2023, the Financial Supervisory Commission (FSC) of Taiwan released industry guidelines for VASPs. The FSC has stipulated that foreign VASPs must obtain regulatory approvals before offering their services in Taiwan. These regulations have been established in response to the collaborative efforts of prominent cryptocurrency exchanges in Taiwan.

On September 26, local exchanges, including MaiCoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito, united to form the Taiwan Virtual Asset Platform and Transaction Business Association. Their primary objective is to bolster the cryptocurrency industry and engage in constructive dialogue with regulatory authorities.

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