Taiwan has proposed a bill for the regulation of crypto, which passed first reading at the parliament today Friday 27 October, reports say.
The special law proposed by parliament member Chang Chiang and 16 other lawmakers would require all crypto platforms operating in Taiwan to apply for a permit or be ordered to cease and desist.
According to Chiang, there is no timeline for the first reading but it may not happen earlier than the end of January 2024 when the tenure of all the lawmakers in Taiwan will expire.
At the moment, the crypto industry in Taiwan is only required to comply with anti-money laundering which the Financial Supervisory Commission (FSC) introduced in 2021.
“After the first reading of the bill, discussions on the regulatory framework for the virtual asset industry have progressed to the next stage,” Yung-Chang Chiang said. “We hope that the Financial Supervisory Commission can also submit their version of a draft bill to the legislature, allowing various sectors of society to further consolidate consensus during the process.”
Speaking earlier this month about FSC guidelines for the crypto industry, Chiang said the industry can form its own self-supervisory rules through a potential industry association, but such measures lack legal enforceability.
“In this case, under the authority of this special law, regulatory authorities can impose administrative penalties on operators who violate these self-regulation rules. Without such a special law, the regulators would lack the ability to impose penalties,” Chiang said at a parliament hearing.
Bill Comes Early
The proposed bill for the regulation of the crypto industry in Taiwan came earlier than expected because according to Chiang, it was expected for reading by the end of November, but this is just the end of October.
The urgency could be due to the fact that some crypto companies in the country are yet to comply with AML rules, and regulators can’t impose penalties without the special rules. Meanwhile, players in the crypto industry in the country have recommended that the regulation of the crypto industry be done by size.
Speaking at the hearing earlier this month, cofounder and Group CRO of Taipei-based crypto exchange XREX, Winston Hsiao while admitting that regulation is necessary, said it needs to be done “step-by-step.”
“If we must discuss the special law at this stage, we hope that the law could regulate crypto platforms by their sizes,” Hsiao said, further stating that smaller firms should be regulated by the the self-supervisory rules formulated by the industry association while bigger firms should comply with requirements of the special rules.
Facilitating Crypto Growth
Though lawmakers wish to put the special rules in place for proper regulation of the crypto industry, this could also be a good thing for the industry. Currently, crypto companies find it difficult to access banking services, probably because they’re not fully regulated.
Representative of global partnerships of Binance Damien Ho made a request that banks become more crypto-friendly.
“We also boldly suggest that the Taiwan government should encourage some private or public banks to become more crypto-friendly and handle [crypto firms’] relevant business,” Ho added. “This can help crypto businesses develop in a more regulated and effective manner.”
With the special rules in place, the crypto industry may finally gain the acceptance and support it needs to thrive in Taiwan.