Taiwan Pursues Crypto Regulation Through a New Law in an Effort to Protect Investors

In September, the FSC of Taiwan will present crypto legislation with an emphasis on safeguarding investors.

In an effort to establish a distinct regulatory framework for the cryptocurrency market, the Financial Supervisory Commission (FSC) of Taiwan is now conducting extensive research and plans to publish its early results by September.

In a parliamentary session, FSC head Tien-mu Huang acknowledged the plan, highlighting the urgent need for regulatory supervision that connects conventional banking with the rapidly growing digital currency industry. The FSC is drafting “crypto asset legislation” with the goal of improving regulation of the cryptocurrency industry.

The FSC plans to outline the preliminary details of this proposed law by September as part of its larger campaign to protect investors’ interests. Local crypto businesses are also working towards the goal of forming a self-regulatory organization. This is a major step towards decentralization, as it will enable the cryptocurrency sector to itself address important issues and maintain compliance standards.

All crypto service providers in Taiwan are required to follow strict anti-money laundering (AML) rules as of July 2021. Apart from these anti-money-laundering requirements, the cryptocurrency industry is mostly unregulated. On the other hand, the FSC took the initiative in September 2023 when it suggested forming an industry coalition to push for self-regulatory standards in the cryptocurrency sector.

Several lawmakers introduced a proposal for a crypto-specific law in October 2023, further cementing the shift towards a controlled crypto economy. Before the FSC unveils its all-encompassing strategy for cryptocurrency regulation, this legislative proposal will be considered. Striking a balance between encouraging innovation in the digital currency arena, protecting investors, and maintaining financial stability is the goal of this projected legislative framework.

This string of events exemplifies Taiwan’s determined pursuit of a clear regulatory framework for the crypto market. Taiwan is aiming to be a leader in crypto regulation by considering a crypto asset-specific law, lending assistance to the establishment of a self-regulatory body, and laying the framework for comprehensive legislation.

The proposed legislative and self-regulatory actions demonstrate a dedication to fostering a trustworthy, open, and thriving cryptocurrency market that conforms to international norms for the safety of investors and the honesty of financial dealings.

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