By 
Taiwan’s parliament has taken a significant step toward cryptocurrency regulation by passing the first reading of a groundbreaking crypto bill. This move reflects Taiwan’s commitment to addressing offshore market concerns and enhancing oversight in the cryptocurrency industry.
The proposed legislation, known as the Virtual Asset Management Ordinance Draft bill, achieved a crucial milestone by clearing its first hearing in Taiwan’s parliament, the Legislative Yuan. Co-authored by 17 lawmakers, this bill underscores the belief that cryptocurrencies are distinct from traditional financial products and, as such, require dedicated regulatory measures.
The primary objective of this bill is to establish a comprehensive regulatory framework and introduce robust supervision over the cryptocurrency sector. While Taiwan’s Financial Supervisory Commission (FSC) had previously issued guidelines for the cryptocurrency industry, the proposed bill is set to provide legal enforceability that was lacking in the FSC’s earlier recommendations.
Presently, virtual asset service providers in Taiwan are obligated to adhere to anti-money laundering regulations. However, the cryptocurrency industry has largely operated without a formal regulatory framework. The proposed bill seeks to change this by imposing operational standards for asset operators, bolstering customer protection, and mandating that all cryptocurrency platforms operating in Taiwan obtain an official permit.
Though the initial draft of the bill calls for cryptocurrency exchange operators to allow regular inspections of their systems by regulators, such as the FSC, it does not take a definitive stance on derivatives or stablecoins. It also does not place restrictions on virtual asset trading for professional investors or explicitly require the use of third-party custodians.
The precise timeline for the bill’s second reading remains unspecified, but the FSC is anticipated to provide its own input to the draft prior to the subsequent reading.
Taiwan’s move to establish cryptocurrency regulation showcases its commitment to fostering a secure and well-regulated environment for the cryptocurrency industry, addressing concerns, and ensuring the protection of investors and stakeholders.
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