FSC Seeks Public Feedback On Crypto Regulations
On Tuesday, Taiwan’s Financial Supervisory Commission (FSC) announced it had finalized the “Virtual Asset Services Act” draft for crypto regulations, adding it would publish the draft on its website to receive feedback from investors, stakeholders, and the public.
After consulting with industry experts and central banks and reviewing foreign regulatory frameworks in Asia and Europe, the financial authority aims to improve the industry’s development, strengthen crypto services and market management, and protect investors’ rights in Taiwan.
The draft details the requirements for VASPs, including licensing requisites, personnel qualifications, and organizational structure. It also outlines the penalties for the Act’s violations and management standards, like the required internal controls and audit systems, customer and asset protection, and financial reporting.
The act will also authorize the banks to issue stablecoins pegged to the New Taiwan Dollar (NTD) if it gets approved by the FSC. Local news media reported in January that the financial authority’s chairman, Peng Jin-lung, stated investors would have a “convenient” entrance to crypto assets in the future through stablecoins could serve as a bridge between the country’s legal tender and virtual currency.
In the announcement, the FSC informed that the public consultation will last 60 days, and feedback can be submitted via its website or by contacting the Securities and Futures Bureau of the FSC. After this period, the Taiwanese watchdog expects to collect sufficient suggestions to submit the finalized law draft to the Executive Yuan by the end of June.
Taiwan’s Regulatory Efforts
Taiwanese authorities have worked for several months to create a crypto framework to develop the industry and protect investors. In September 2024, the FSC greenlit foreign crypto exchange-traded funds (ETFs) for professional investors.
In October, the FSC announced an overhaul of the Anti-Money Laundering (AML) framework to include crypto businesses. The new AML framework, initially scheduled for January 1, 2025, was implemented on November 30, 2024. It introduced stricter AML guidelines for VASPs and required all crypto firms to complete the AML registration with the Taiwanese government by September 2025.
Moreover, the FSC now closely monitors the listing and delisting of digital assets, and crypto firms are expected to establish measures against illicit trading and report any suspicious activity related to trading volume or price movement.
In November, Finance Minister Chuang Tsui-yun and Director-general of the Taxation Administration Sung Hsiu-ling pledged to review the current regulations within the following months to “better enable the government to tax cryptocurrency gains.”
Taiwan’s Ministry of Finance announced it would develop regulations to address crypto tax evasion. The existing policy collects business and corporate income taxes from 26 exchanges that obtained the FSC’s AML licenses. However, the financial agency has not implemented a system that effectively collects digital asset-related taxes from individuals.
Bitcoin (BTC) trades at $87,153 in the one-week chart. Source: BTCUSDT on TradingView
