The association will officially launch latest by June and will represent the industry as the government introduces crypto laws in Taiwan.
The government of Taiwan has approved a local crypto industry association as it takes steps toward robust regulation of the country’s sector. On Friday, Taiwan’s Ministry of the Interior gave the green light to the local crypto industry working group, which will now continue preparing to fully establish the association before June ends.
The Taiwan Crypto Association’s Working Group
Last September, a few crypto firms banded together to form a preparatory group to apply for approval and do some groundwork in anticipation of the government’s proposed crypto law. Three major exchanges, including BitoGroup, MaiCoin Group, and Ace Exchange, are the first three founders of the Taiwan Virtual Asset Platform and Transaction Businesses Association Preparatory Group. Others include crypto exchanges Rybit, Shangbito, Xrex, and Hoya Bit. As of Friday, when it received government approval, the group comprised 22 crypto firms.
In a press release, the chairman of the Taiwan Fintech Association, Cai Yuling, said the group will function as an “industry representative so that it can build consensus and negotiate externally”. Yuling, who is also a general consultant for the group, said the combination of strong crypto holders will help Taiwanese players compete on the world stage.
The press release also notes that the association will self-regulate based on principles derived from the Financial Supervisory Commission (FSC) to ensure self-discipline. The group expects that abiding by these rules will help the association mature enough to introduce traditional players to the crypto industry in Taiwan. The group already has its eyes on traditional banks, insurance companies, accountants, and financial technology firms.
Digital Asset Regulation in Taiwan
Currently, the crypto industry in Taiwan is mostly unregulated. Apart from a requirement to comply with anti-money laundering laws, there are no robust regulations and guidelines specifically addressing the crypto sector. The Taiwan VASP Group hopes to represent the sector as the government designs crypto laws to adequately protect customers and crypto firms so that the regulations do not stifle innovation.
The principles expected of the Financial Supervisory Commission include other requirements in addition to allowing virtual asset service providers to self-regulate. For instance, the guidelines will emphasize information disclosure and require firms to create standards for reviewing digital assets. These standards will inform rules on listing and delisting crypto assets. In addition, the rules will require crypto firms to separate company assets from customer funds.
One major development expected is the prohibition of offshore cryptocurrency companies. Essentially, all crypto companies looking to serve users in Taiwan must register in the country and adhere to the FSC’s anti-money laundering standards.
A recent speech from FSC Chairman Huang Tien-mu confirmed that Taiwan will announce a new draft of crypto regulations by September. Although the speech did not offer specifics, the FSC Chairman spoke generally about the crypto sector. He highlighted the use of crypto for illicit activities and warned of inherent dangers. In addition, Tien-mu noted the connection between the crypto and traditional financial sectors and hinted at supportive legislation in this regard.