Taiwan has made a significant move in the direction of cryptocurrency regulation with the first reading of a draft crypto act at the Legislative Yuan, the country's parliament. The proposed legislation, if passed and enacted, would introduce regulatory oversight for cryptocurrency platforms operating within Taiwan.
The special crypto law, jointly proposed by 17 lawmakers including Yung-Chang Chiang, would mandate that all cryptocurrency platforms in Taiwan seek a permit to continue their operations. Failure to obtain the necessary permit could result in regulatory authorities ordering the cessation of operations. This special law is seen as a significant step towards introducing regulatory authority within the cryptocurrency sector in Taiwan.
Yung-Chang Chiang stated that discussions regarding the regulatory framework for the virtual asset industry have now advanced to the next stage after the first reading of the bill. He expressed the hope that the Financial Supervisory Commission (FSC) would provide their version of the draft bill for legislative consideration, which would allow a wider consensus to be built during the process. The proposed special law would provide regulatory authorities with the power to impose administrative penalties on operators found in violation of self-regulation rules.
The FSC, in a bid to foster industry self-regulation, had previously released guidelines for the cryptocurrency sector to create its own supervisory rules via a potential industry association. However, these guidelines lacked legal enforceability, prompting lawmakers to push for the special crypto law to provide the necessary legal basis for regulatory actions.
Although the first reading of the bill has been successfully passed, a specific timeline for the second reading has not been set. It is estimated that the second reading may not take place before the end of January 2024. This is because the current tenure of all lawmakers in Taiwan is set to conclude next January. At present, Taiwan has imposed anti-money laundering requirements on virtual asset services providers, introduced in July 2021, but beyond that, the cryptocurrency industry remains largely unregulated.
The passing of this special crypto law, once it reaches a second reading, will potentially pave the way for comprehensive cryptocurrency regulation in Taiwan, bringing oversight and accountability to the sector.