On Oct. 25, Taiwanese legislators introduced the Virtual Asset Management Bill to the unicameral parliament, the Legislative Yuan. The bill aims to provide “better protection” for the customers and “properly supervise” the industry.
The 30-page bill appears moderate in its demands for the industry. It suggests some common sense obligations for the virtual asset service providers (VASPs), such as separating customer funds from the company’s reserve funds, establishing an internal control and audit system, and joining the local trade association.
However, at this point, it doesn’t require stablecoin issuers to hold a 1:1 ratio of reserve funds, and it doesn’t mention algorithmic stablecoins. As to marketing activities, the rules for advertising are to be determined by the “competent authority.”
The bill suggests fines for VASPs operating without a license — no less than two million Taiwanese dollars (around $60,000) and no more than twenty million ($600,000). The companies already operating in the Taiwan market will get six months to obtain a license after the bill comes into force.
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In September 2023, Taiwan’s Financial Supervisory Commission (FSC) also released industry guidelines for VASPs. The FSC prohibits foreign VASPs from providing their services in Taiwan without obtaining necessary approvals from the regulator.
The rules were created as major cryptocurrency exchanges in Taiwan have formed a self-regulatory association. On September 26, local exchanges like Maicoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito joined forces to create the Taiwan Virtual Asset Platform and Transaction Business Association. They aim to support the crypto industry and work with regulators.
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