Legislators from Taiwan introduced the Virtual Asset Management Bill to the unicameral Legislative Yuan on October 25. The bill aims to provide “better protection” for consumers and “properly supervise” the industry.
The 30-page bill imposes moderate requirements on the industry. It recommends that virtual asset service providers (VASPs) separate customer funds from the company’s reserve funds, establish an internal control and audit system, and join the local trade association.
It does not require stablecoin issuers to maintain a 1:1 ratio of reserve funds, nor does it mention algorithmic stablecoins. Regarding marketing activities, the “competent authority” will determine the regulations for advertising.
The measure proposes fines of at least 2 million Taiwanese dollars (approximately $60,000) and no more than 20 million TWD ($600,000) for VASPs operating without a license. After the measure goes into effect, companies currently operating in Taiwan will have six months to obtain a license.
Taiwan’s Financial Supervisory Commission (FSC) also released industry guidelines for VASPs in September 2023. The FSC prohibits non-Taiwanese VASPs from offering their services in Taiwan unless they have obtained the essential regulatory approvals.
The rules were established due to the formation of an association of self-regulatory cryptocurrency exchanges in Taiwan. Local exchanges, including MaiCoin, BitstreetX, Hoya Bit, Bitgin, Rybit, Xrex, and Shangbito, formed the Taiwan Virtual Asset Platform and Transaction Business Association on September 26. They intend to aid the cryptocurrency industry and collaborate with regulators.
