- FSC drafts “Virtual Asset Management Act” to establish clear operational standards for licensing, capital requirements, and market conduct.
- Public hearings for new crypto regulations to begin early next year, aiming to align local laws with global standards.
Taiwan is actively updating its regulations for virtual asset service providers (VASPs), introducing a registration system effective November 30. This initiative, led by the Financial Supervisory Commission (FSC) under the direction of Chairman Peng Chin-lung, aims to address the compliance and operational standards for cryptocurrency operations within the region.
Regulatory Framework and VASP Inspections
The FSC is drafting the “Virtual Asset Management Act,” with a research team conducting preliminary studies. Public hearings are scheduled to start early next year, with current discussions focusing on defining clear operational standards for VASPs.
These standards cover a range of requirements, including licensing conditions, consumer protection, capital holdings, asset custody, and market transaction norms. The law is expected to be submitted for administrative approval by June of next year.
Currently, 26 VASPs have complied with Taiwan’s Anti-Money Laundering laws, with additional applications under review. The FSC has conducted financial inspections on four VASPs last year and plans to inspect six more in the upcoming months, focusing on improving compliance practices across the industry.
Global Influence on Local Markets
The discussion also touched on the impact of the U.S. presidential election, with potential policy changes that could influence the cryptocurrency market. The FSC is monitoring these developments closely, considering the possible need for rapid adaptation to international policy shifts.
A significant portion of local investors currently use international platforms for cryptocurrency transactions. This reliance on foreign VASPs poses a challenge for Taiwan in attracting these businesses to operate under local regulations, which would provide greater protection for Taiwanese investors.
The FSC is exploring strategies to encourage reputable international VASPs to establish operations in Taiwan, aiming to balance regulatory oversight with market attractiveness.
Taiwan’s Crypto Regulations
The FSC’s efforts are not just about managing the existing VASPs but also about enhancing Taiwan’s appeal as a competitive player in the global cryptocurrency market. The aim is to create a regulatory environment that supports the growth and standardization of crypto operations, ensuring market stability and investor trust.
