Taiwan’s Financial Supervisory Commission has confirmed that it will become the main cryptocurrency regulator in the country.
This upcoming cryptocurrency legislation was revealed to lawmakers in Taiwan’s parliament as part of a hearing about global banking stability. However, reports cited by coindesk.com revealed that the FSC will not be regulating NFTs, as they are still emerging as an asset class.
Officials from XREX, a Taipei-based TradeTech fintech, brought up the extendibility and composability of NFTs as well as their ability to represent a broad spectrum of things such as commercial products, securities, and commodities. They also highlighted that the FSC will likely require more time to develop a proper set of NFT classification guidelines. XREX officials called for the virtual asset service provider industry to work with the FSC to define regulatory operations and to help form an industry self-regulatory body to help develop a set of rules.
There are two financial regulators in Taiwan, namely the Central Bank of the Republic of China and the Financial Supervisory Commission. The former specialises in monetary policy and foreign exchange regulations while the latter oversees banking regulation, securities and futures, as well as anti-money laundering initiatives.
A framework for this new cryptocurrency law is expected to come out by June 2023, while an initial draft will follow later in 2023.
The fall of FTX sped up Taiwan’s crypto regulation efforts
When FTX went bankrupt in November 2022, it sent ripples throughout the crypto industry, particularly as far as regulation is concerned. In Taiwan’s case, it brought a sense of urgency to crypto regulation, as Taiwan held one of the largest user bases of the exchange per capita according to coindesk.com.
In the past, Taiwan’s main crypto regulatory efforts involved regulating the asset class under the framework of controlling money laundering. However, in July 2022, the Financial Supervisory Commission issued a note to the banking industry, indicating that they should not grant virtual assets providers (VASPs) the status of merchants in operations with credit card holders. This represented a ban on buying crypto with a credit card on the island. According to cointelegraph.com, the note included a reminder for the Association of Banks on the speculative and risky nature of virtual assets.