On October 25th, Taiwanese lawmakers unveiled the Virtual Asset Management Bill in the country’s unicameral parliament, the Legislative Yuan.
This legislation is designed to enhance customer protection and establish proper oversight within the virtual asset industry.
Spanning 30 pages, the bill puts forth a set of reasonable requirements for virtual asset service providers (VASPs).
These include the segregation of customer funds from the company’s reserve funds, the implementation of an internal control and audit system, and membership in the local trade association.
Notably, the bill currently does not mandate stablecoin issuers to maintain a 1:1 ratio of reserve funds, and it does not address algorithmic stablecoins.
The specific rules governing advertising and marketing activities will be determined by the “competent authority.”
For VASPs operating without a license, the bill proposes fines ranging from a minimum of 2 million Taiwanese dollars (approximately $60,000) to a maximum of 20 million TWD ($600,000).
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Existing companies in the Taiwanese market will have a grace period of six months from the bill’s enactment to secure the necessary licenses.
In September 2023, Taiwan’s Financial Supervisory Commission (FSC) also issued industry guidelines tailored to VASPs.
Foreign virtual asset service providers are prohibited from offering their services in Taiwan without obtaining regulatory approvals from the FSC.
These regulatory measures have emerged as prominent cryptocurrency exchanges in Taiwan have taken proactive steps toward self-regulation.
On September 26th, several local exchanges, including MaiCoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito, united to establish the Taiwan Virtual Asset Platform and Transaction Business Association.
Their primary objectives are to support the cryptocurrency industry and collaborate closely with regulators to ensure responsible growth.
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