Taiwan has ordered its financial watchdog, the Financial Supervisory Commission (FSC), to take over the regulation of the country’s crypto industry. The move comes after the recent rise in cryptocurrency-related scams and concerns about the market’s lack of transparency. The FSC will now be responsible for supervising and overseeing all crypto-related activities, including exchanges, trading platforms, and ICOs. This decision is a significant step towards legitimizing and establishing a more secure crypto industry in Taiwan.
Taiwan Empowers FSC to Regulate Cryptocurrency
On March 20, Taiwan’s Financial Supervisory Commission (FSC) was officially designated as the primary regulator for cryptocurrency. However, non-fungible tokens (NFTs) were excluded from this new responsibility. According to local media outlets, Huang Tian-mu, the FSC chair, unofficially announced the new role stating that the government has directed the commission to oversee crypto transactions and payments. At first, the FSC will focus on cryptocurrency exchange platforms, ensuring that they separate their assets from their depositors’.
Furthermore, the FSC is set to supervise the exchanges’ product listings and customer protection measures. Huang also revealed that the FSC is evaluating the possibility of establishing a self-regulatory system for local crypto platforms, which will provide more security and transparency to the ecosystem.
Taiwan is in the early stages of crafting its cryptocurrency regulation. The country released anti-money laundering rules for crypto service providers in July 2021, but nothing on the regulatory front has been forthcoming since then. Taiwan has been considered crypto-friendly, as there are flexible regulations allowing experimentation with new ideas. Jason Fang, co-founder of Sora Venture, praised Taiwan’s regulatory environment in a podcast interview with CryptoSlate. The central bank is also working towards launching its central bank digital currency (CBDC) sometime in the future.
The CBDC project was characterized by the central bank as necessary for Taiwan’s young population to embrace mobile payment systems, which are increasingly prevalent. As the country’s regulatory environment remains constructive, more companies and projects appear to look to Taiwan as a supportive hub for cryptocurrency innovation.
The recent decision to empower the FSC as the primary regulator for cryptocurrency is therefore a good step for the industry. With clear regulatory oversight, investor confidence will likely increase, providing a stable and secure environment for the nascent industry to grow.