Taiwan Lawmakers Propose Virtual Asset Management Bill Aimed at Regulating Crypto Industry
Summary:
Taiwanese lawmakers have proposed the Virtual Asset Management Bill to optimize customer protection and industry regulation. The bill sets obligations for Virtual Asset Service Providers (VASPs) like segregating customer and company reserve funds, establishing an audit system, and requiring membership to the local trade association. It includes penalties for operating without a license and offers a six-month period for existing companies to secure a license. The bill represents part of a larger move to regulate the crypto industry, including the establishment of a self-regulatory body by major Taiwanese crypto exchanges.
Taiwanese lawmakers have brought the Virtual Asset Management Bill to the table in the Legislative Yuan, the country's single-house legislature, on October 25th. The primary purpose of the legislation is to offer enhanced customer protection and to regulate the industry appropriately. The 30-page proposed law seems fairly balanced in its requirements for the sector, stipulating logical responsibilities for virtual asset service providers (VASPs). These include segregating client and company reserve funds, setting up an internal control and audit system, and becoming a member of the local trade association. Current guidelines do not enforce a 1:1 ratio of reserve funds on issuers of stablecoins, nor do they cover algorithmic stablecoins. Rules for promotional activities will be administered by the designated authority. VASPs conducting business without the necessary license face penalties, ranging from a minimum of 2 million Taiwanese dollars (approximately $60,000) to a maximum of 20 million TWD ($600,000). Existing companies in Taiwan will be given a half-year grace period to secure a license once the law is implemented. In related news, Circle, a blockchain services company, launched a point-to-crypto program in association with a Taiwan based convenience store chain earlier this year. As of September 2023, Taiwan's Financial Supervisory Commission (FSC) has also released industry guidelines for VASPs. The FSC disallows foreign VASPs from offering their services in Taiwan unless they have received regulatory approval. This initiative surfaces as major crypto exchanges in Taiwan have developed a self-regulatory body. On September 26th, local exchanges such as MaiCoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito consolidated to establish the Taiwan Virtual Asset Platform and Transaction Business Association. Their objective includes supporting the crypto sector and collaborating with regulators.
Published At
10/27/2023 8:56:00 AM
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