[NEWS] Taiwan submits proposal to regulate crypto assets, introduces licensing system, etc.

On the 27th, the Taiwanese parliament began deliberations on a bill on regulating crypto assets (virtual currencies). The bill, titled the "Virtual Currency Management Bill," was submitted by a legislator of the Taiwanese parliament on the 25th of this month, and is based on the development of the cryptocurrency industry and customer protection.

The background to the submission of the bill is the "Terra Luna Shock" that occurred last year and the collapse of FTX. In particular, the collapse of FTX caused losses for Taiwanese investors of about NT$60 billion (about JPY 277 billion). According to legislators, this was the seventh largest in the world.

Nevertheless, the cryptocurrency industry is growing, and Taiwan is no exception, he said.

On the other hand, he pointed out that despite the growth of the market, Taiwanese authorities are reluctant to collect information on cryptocurrencies, and there is not enough data. He raised concerns about the current situation in which the Financial Supervisory Commission (FSC) is not keeping up with the development of the cryptocurrency industry.

He explained that this situation is limiting the growth potential of Taiwan, and that it is necessary to once again develop the cryptocurrency industry and establish order, while at the same time regulating it to protect customers.

Taiwan announced guidelines on preventing money laundering in 2021 and has been supervising cryptocurrency-related companies up to now. However, there are many other areas that are still underdeveloped, which is why the bill was submitted.

The bill includes regulations on the following:

• Introduction of a licensing system for cryptocurrency-related businesses
• Obligation to join industry associations designated by the competent authority
• Rules on the issuance and transfer of cryptocurrencies, etc.
• Segregated management of customer assets
• Regulations on cryptocurrency-related advertising
• Submission of annual reports
• Prohibition and penalties for inappropriate trading activities

The bill includes stricter regulatory proposals than ever before, but there are some areas that are less well developed compared to Japan, such as the use of third-party custodians and the handling of backing assets and algorithmic types in stable coins.

Last month, the FSC published industry guidelines for cryptocurrency-related businesses. Among other things, the bill mentions a licensing system, prohibiting overseas businesses already operating in the country from providing services without permission.

In addition, companies already operating in the country will likely be required to obtain a license within six months of the bill's enforcement.

Source:Bill
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