Taiwan has become more aware of risks involving cryptocurrencies since the collapse of the FTX exchange late last year, and is following in the footsteps of Singapore and Hong Kong in keeping a keener eye on the crypto sector.
Last week, the Financial Supervisory Commission (FSC) announced guidelines for crypto service providers and exchanges, 10 days after confirming that it oversees crypto-related investments and transactions nationwide.
It said it has received instructions from the Executive Yuan to oversee the crypto sector’s development in Taiwan. It is to focus on establishing a self-regulating mechanism for service providers that allows members of the sector to monitor their own legal, ethical and security standards, rather than acting as an outside regulatory agency that monitors and enforces those standards.
The guidelines include the disclosure of information by crypto service providers, the review procedure for the listing and removal of crypto products, the separation of assets between service providers and clients, and the assurance of transparency and fairness.
Preventing money laundering, protecting consumers’ interests, maintaining information security, promoting institutional auditing, and managing so-called “hot” and “cold” crypto wallets are also part of the guidelines.
As the commission seems to have no intention to establish special legislation on the crypto sector, but aims to focus on protecting consumers and preventing money laundering, its regulatory approach should allow the local crypto sector room for further development and innovation.
Except for the review procedure for the listing and removal of products, which could have a greater effect on the sector, other guidelines, such as information disclosure, asset separation and money laundering prevention, are all basic requirements that firms in the sector should implement.
Another reason that the commission does not want to act as a comprehensive regulatory body is that it is not easy to govern the crypto sector, let alone require cooperation from offshore service providers or exchanges to comply with Taiwan’s regulatory framework.
In general, it is welcome news that the regulator supports growth in Taiwan’s crypto sector and wants to help build the necessary ecosystem here, as it is an opportunity for the sector to build trust with the public and push its innovations toward the mainstream.
However, if the details of its guidelines, which are slated to be published by the third quarter of this year, are too cumbersome, it would likely stifle the development of Taiwan’s crypto sector and push local investors toward offshore crypto platforms, which would be contrary to the commission’s original intention of protecting consumers in devising a regulatory framework.
Moreover, as innovative blockchain applications and non-fungible tokens continue to emerge, the regulator does need to retain the flexibility of development in the sector and allow it to continue moving forward.
While doing everything at once is not an option for the commission, it must at least reserve the power to inspect domestic crypto platforms when things go wrong. It also has to work with crypto firms to establish a mechanism for consumer protection.
At the same time, the commission needs to ask foreign firms to comply with Taiwan’s consumer protection and financial regulations. Most importantly, it must continue to review and adjust its regulatory measures on a rolling basis to ensure the sector’s long-term development.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017