The Financial Supervisory Commission (FSC) of Taiwan has announced its plans to propose new digital asset regulations for the country in September 2024. The aim of the upcoming draft bill is to establish more effective regulations for digital asset markets and ensure the safety of investors, according to Huang Tien-mu, the chairman of the FSC. Huang also warned investors about the potential risks of fraud associated with digital currencies and stated that strict penalties will be imposed on merchants attempting to deceive investors.
In his speech, Huang emphasized the increasing interconnection between digital assets and the traditional financial system, highlighting the potential dangers that digital assets pose to the stability of the legacy financial system. To address these risks, the committee will develop laws to protect the stability of the traditional financial system from the impact of digital assets.
The Virtual Asset Management Bill was introduced to Taiwan’s unicameral parliament on October 25. The bill aims to provide better protection for customers and effectively supervise the digital asset industry. It also proposes imposing fines ranging from two million Taiwanese dollars (approximately $60,000) to 20 million TWD ($600,000) on unlicensed virtual asset service providers.
In addition, Taiwan’s Chamber of Commerce will release a study on Bitcoin exchange-traded funds (ETFs) in April. Tien-mu mentioned that Taiwan is considering allowing spot Bitcoin ETFs under its regulatory framework but cautioned against investing in foreign crypto-based exchange-traded products.
It is worth noting that Taiwan’s FSC prohibits foreign virtual asset service providers from operating in the country without obtaining necessary approvals from the regulator. These rules were established after major cryptocurrency exchanges in Taiwan formed a self-regulatory association on September 26, 2023, to support the crypto industry and collaborate with regulators.
Furthermore, on November 9, 2023, the FSC granted Cathay Securities the country’s first security token offering license, enabling the firm to issue $930,000 worth of tokenized green bonds every six months.
In considering the possibility of crypto ETFs, Taiwan will carefully review global trends before making any decisions.