Taiwan’s financial watchdog expects to introduce a draft bill on digital asset regulation later this year to protect consumers and the stability of the country’s financial sector.
Chairman Huang Tien-mu revealed that the Financial Supervisory Commission (FSC) will propose the laws in September. Huang appeared before parliament to address lawmakers’ concerns, with digital assets among the topics where the FSC’s approach was questioned.
Huang told the lawmakers that his agency has started research on digital asset regulatory proposals, with the preliminary studies expected to be completed by September.
He added that the FSC prioritizes investor protection, and the upcoming regulatory proposals will reflect this focus.
The FSC first introduced a formal regime for virtual asset service providers (VASPs) in 2021, ordering the industry to abide by the country’s anti-money laundering rules. However, the agency was only confirmed as the official digital asset watchdog in March last year.
In September, it published its first guidance for VASPs. Among the requirements was the segregation of platform and customer assets. They must also publish a white paper detailing their operations, with exchanges ordered to set up a transparent review mechanism for listing and delisting tokens. Overseas platforms must set up local subsidiaries to serve Taiwanese investors.
A month later, legislators introduced the Virtual Asset Management Bill in parliament. Most of the stipulations were templates, from proper custody to asset segregation. The bill proposed a fine between $60,000 and $600,000 for operating without a license.
Speaking to lawmakers this week, Huang acknowledged that digital assets are increasingly
becoming intertwined with the legacy financial system. This makes it crucial to regulate the former and ensure it doesn’t pose any danger to the latter.
Huang, however, played down digital assets, stating that they have no intrinsic value.
“The emergence of Bitcoin has nothing to do with the real economy,” he told lawmakers.
He further warned investors about the volatility of digital assets, reminding them that they could lose all their money and that his agency could do little to protect them.
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