The virtual property management law was introduced in Taiwan’s parliament
The Bill focuses on consumer protection, regulatory obligations and industry self-regulation. Major crypto exchanges in Taiwan have previously formed the Taiwan Virtual Asset Platform and Exchange Trade Association. Taiwan's Financial Supervisory Commission (FSC) has also recently issued industry guidelines for VASPs.
In a recent push for oversight and consumer protection in the cryptocurrency industry, Taiwan's lawmakers introduced the Virtual Asset Management Bill to the unicameral legislature on October 25, 2023.
The bill aims to establish clear guidelines for virtual asset service providers (VASPs) while fostering industry growth.
Key provisions of the bill
The 30-page bill lists several important provisions.
Customer Protection: The bill emphasizes the need for better customer protection in the cryptocurrency industry. It requires virtual asset service providers to separate client funds from their reserve funds, ensuring transparency and security. Regulatory Obligations: VASPs are required to establish internal control and audit systems to maintain compliance. Joining a local trade association is also encouraged to enhance industry self-regulation. Stablecoins and Advertising: Notably, the bill does not require stablecoin issuers to maintain a 1:1 reserve ratio, allowing for flexibility in this aspect of regulation. Additionally, advertising rules are determined by the authority, which provides flexibility in marketing activities. Licensing and Penalties: VASPs operating without a license face fines ranging from NT$2 million to NT$20 million. Existing market players have a six-month window to obtain the necessary approvals after the bill becomes law.
Previous attempts at self-regulation by industry participants
The introduction of the Virtual Asset Management Bill closely follows the creation of the Taiwan Virtual Asset Platform and Marketing Trade Association.
MaiCoin, BitoGroup, Ace Exchange, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shanbito have joined forces to support the crypto industry and engage with regulators. The association was created to guide the industry, set standards and create common understanding.
In September 2023, Taiwan's Financial Supervisory Commission (FSC) issued industry guidelines for VASPs, restricting foreign VASPs from operating in Taiwan without obtaining necessary approvals from the regulator.
The FSC's move underscores the government's commitment to providing regulatory transparency.
Binance registration application in Taiwan
Binance, one of the largest cryptocurrency exchanges in the world, sought registration in Taiwan, showing its desire to comply with local regulations. Binance previously operated domestically in the country through Binance International Limited's Taiwan branch (Seychelles).
🇹🇼 #Binance has applied for registration in Taiwan.
The largest cryptocurrency Binance intends to obtain registration in Taiwan under the anti-counterfeiting law.
According to Taiwan Ministry of Commerce records, in May this year,… pic.twitter.com/Jum73kjgn1
— Iren Barnes (@IrenCryptoQueen) August 11, 2023
These developments reflect Taiwan's evolving approach to cryptocurrency regulation, aiming to balance industry growth with necessary oversight and customer protection. The landscape of Taiwan's cryptocurrency industry continues to evolve as Circle, BitoGroup and Taiwan Familymart recently partnered to launch a ‘Points-to-Crypto' service in the country.
