Taiwan’s Financial Supervisory Commission (FSC) is contemplating the approval of cryptocurrency exchange-traded funds (ETFs) within the country, marking a potential shift in its regulatory stance. Currently in the “exploratory phase,” the FSC is closely observing global markets for insights into the viability of crypto ETFs.
Notably, it is monitoring developments in the United States, where the Securities and Exchange Commission plans to review spot Bitcoin ETFs in January, as well as tracking activities in Canada and Australia, where local exchanges are actively trading crypto ETFs. Acknowledging the emergence of cryptocurrency futures commodities on various global exchanges, including the Toronto Stock Exchange, New York Stock Exchange, Nasdaq Exchange, Chicago Board Options Exchange, and Hong Kong Stock Exchange, the FSC aims to gradually liberalize rules for digital asset trading.
However, this liberalization strategy emphasizes the importance of “self-discipline and regulation” to navigate the challenges posed by the inherent volatility of cryptocurrencies. Taiwan has witnessed a recent acceleration in crypto regulatory developments, evident in the introduction of the Virtual Asset Management Bill by local legislators in October. This 30-page document outlines regulatory requirements for the industry, emphasizing prudent obligations for virtual asset service providers.
These obligations include the separation of customer funds from company reserve funds. Notably, the bill does not mandate stablecoin issuers to maintain a 1:1 ratio of reserve funds and does not prohibit the use of algorithmic stablecoins. In September, the FSC took a proactive step by releasing industry guidelines for virtual asset service providers, prohibiting the involvement of foreign non-licensed entities.
Additionally, major local crypto exchanges have collaborated to form a self-regulatory association, aligning with the FSC’s efforts to bring stability and oversight to the evolving crypto landscape in Taiwan.
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