The Taiwan Crypto Association communicated with El Salvador’s Virtual Assets Bureau, Presidential Office, and central bank, calling for enhanced regulatory capabilities. Taiwan’s current rules don’t allow cryptocurrency derivatives trading and stablecoin issuance, stressing the need for legislation to support the crypto market. El Salvador remains among the few crypto-friendly countries. It made Bitcoin a legal tender in September 2021.
Taiwan’s crypto regulation stance
During one of Taiwan’s public hearings on Virtual Asset Supervision, cryptocurrency-related discussions took center stage. These discussions encompassed a range of potential developments, such as the introduction of leveraged derivatives trading and the establishment of a dedicated Financial Technology Bureau. Attendees at the event included representatives from prominent crypto exchanges like Bitfinex and Binance.
The formation of the Virtual Assets Bureau aims to strengthen safeguards for cryptocurrency traders and regulate digital asset trading activities. Additionally, insider information suggests that Taiwan plans to release its Virtual Asset Service Provider (VASP) guidelines by the end of September 2023, with the Financial Supervisory Commission (FSC) taking the lead in monitoring digital currencies, combatting money laundering, and ensuring compliance among crypto companies and exchanges with the prescribed regulations.
FTX crisis triggered Taiwan’s crypto regulation push
Taiwan has traditionally maintained a relatively hands-off approach to crypto regulation, primarily monitoring the asset class to prevent money laundering. In September 2022, authorities issued licenses to 24 cryptocurrency firms as part of their anti-money laundering initiatives.
However, in the wake of FTX’s downfall, regulators have become more proactive in implementing regulations. FTX, which eventually went bankrupt, had attracted numerous Taiwanese users due to its enticing interest rates on USD deposits.
Despite mainland China’s ban on crypto mining and trading, recent actions by the Taiwan Crypto Association align with regulatory efforts to establish control and ensure a strong regulatory framework in the ever-evolving cryptocurrency industry.
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