The Financial Supervisory Commission (FSC) is set to propose a new digital asset regulations draft for Taiwan in September 2024. The aim of the upcoming bill is to establish more effective regulations for digital asset markets and ensure the safety of investors, as reported by UDN on March 4. In his speech, FSC Chairman Huang Tien-mu 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 defraud investors. Huang emphasized the increasing interconnectedness between digital assets and the traditional financial system, highlighting the need to protect the stability of the legacy financial system from the risks posed by digital assets. To this end, the committee will develop laws to safeguard the stability of the traditional financial system.
In October 25, Taiwanese legislators introduced the Virtual Asset Management Bill to the unicameral parliament. The bill aims to offer better protection for customers and proper supervision of the industry. It also proposes a fine of between two million Taiwanese dollars (approximately $60,000) and 20 million TWD ($600,000) for unlicensed virtual asset service providers (VASPs).
The Chamber of Commerce in Taiwan is planning to release a study on Bitcoin (BTC) exchange-traded funds (ETFs) in April, according to Gao Jingping, the deputy director of the Warranty Bureau. Tien-mu also mentioned that Taiwan is considering allowing spot Bitcoin ETFs under its regulatory purview, but cautioned market participants against investing in foreign crypto-based exchange-traded products. The FSC prohibits foreign VASPs from offering their services in Taiwan without obtaining the necessary approvals from the regulator.
These regulations were established after major cryptocurrency exchanges in the country formed a self-regulatory association on September 26, 2023. Local exchanges such as BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito joined forces to support the crypto industry and collaborate with regulators.
On November 9, 2023, the FSC granted Cathay Securities the first security token offering license in the country, allowing the firm to issue tokenized green bonds worth $930,000 every six months. The decision on whether to allow crypto ETFs in Taiwan will be based on a review of global trends.