Experts around the world are now taking the crypto industry on a serious note as it poses financial threats and illicit activities to a country. As a result, regulators are making rampant efforts to bring the crypto industry under tight scrutiny and regulation to prevent any fraud or theft to crypto investors. According to reports, the Financial Supervisory Commission of Taiwan will be the primary regulator of cryptocurrencies on the island.
Taiwan’s Crypto Space To Have Special Legislation
According to a head regulator, Taiwan will soon have special legislation to regulate cryptocurrency as Taiwan’s Financial Supervisory Commission will be the primary overseer of cryptocurrencies on the island to regulate cryptocurrencies.
Huang Tien-mu disclosed this to lawmakers in Taiwan’s parliament during a hearing about global banking stability. In addition, it is reported the FSC is set to be announced as the regulator of Taiwan’s crypto industry, citing sources in the legislature.
This news has already garnered attention as Wayne Huang, co-founder, and CEO of XREX, welcomed the news, stating that the cryptocurrency industry can only grow when it’s properly regulated. “Our next steps would be for the virtual asset service provider industry to collaborate with the FSC to define regulatory operations,” he said. The CEO further added, “One of the first steps is to form an industry self-regulatory body to help develop a set of rules.”
FSC Won’t Regulate NFTs
It has been further reported that the regulator won’t be responsible for regulating NFTs. Local Taiwan media stated the FSC’s Huang believed NFTs are still emerging as an asset class and it’s too early to regulate them.
Huang said, “Due to the extendibility and composability of NFTs, they can represent a broad spectrum of things ranging from commercial products to commodities to securities. Therefore, the FSC likely needs more time to develop a proper set of NFT classification guidelines.”
Taiwan currently has two financial regulators: the Central Bank of the Republic of China (Taiwan’s official name) and the FSC. The Central Bank controls monetary policy and foreign exchange regulations, while the FSC has a broad remit over everything from banking regulation, securities, and futures, to anti-money laundering.
Alex Liu, CEO of Maicoin, said, “Getting the balance between experimentation and investor protection is the order of the day.”
However, some analysts in Taiwan’s parliament had called for the newly-established Ministry of Digital Affairs (MODA) to be the chief crypto regulator, others have claimed that the Ministry is relatively new to this and he may not frame a proper regulation compared to the FSC.
“Militaries use guns and bullets. Let’s say they started using laser guns. Would you expect that to still fall under the defense ministry or a new department of directed energy weapons?” Liu remarked.
The collapse of the crypto exchange behemoth FTX has significantly pushed several countries to plan for crypto regulations as it wiped billions of dollars from the global crypto market cap, resulting in a market crash and manipulation. Previously, Taiwan took a hands-off approach to crypto regulation by only regulating the asset class under the framework of controlling money laundering.
Last September, authorities gave licenses to 24 crypto platforms under the island’s AML compliance system. However, the collapse of FTX added a sense of the need for a framework to Taiwan’s regulatory push as the Taiwanese were one of the largest users of the FTX exchange per capita, attracted by its lucrative high-interest rates for USD deposits compared to local banks.
A primary framework for the law is expected to be released by June, with an initial draft for later this year.