In September 2024, the Financial Supervisory Commission (FSC) of Taiwan plans to propose new regulations for digital assets in order to enhance market regulations and protect investors, as reported by UDN on March 4. FSC Chairman, Huang Tien-mu, emphasized the need for stricter penalties for fraudulent activities related to digital currencies. He also highlighted the growing interconnectedness between digital assets and the traditional financial system, stressing the importance of safeguarding the stability of the legacy financial system from the risks posed by digital assets.
In October 2023, Taiwanese lawmakers introduced the Virtual Asset Management Bill to the parliament with the aim of providing better protection for customers and ensuring proper supervision of the industry. The bill also proposed imposing fines ranging from two million Taiwanese dollars (approximately $60,000) to 20 million TWD ($600,000) for unlicensed virtual asset service providers (VASPs).
Additionally, Taiwan’s Chamber of Commerce is set to release a study on Bitcoin exchange-traded funds (ETFs) in April, according to Gao Jingping, the deputy director of the Warranty Bureau. Tien-mu mentioned that Taiwan is considering allowing spot Bitcoin ETFs under its regulatory oversight but advised caution when investing in foreign crypto-based exchange-traded products.
To regulate the industry, Taiwan’s FSC has prohibited foreign VASPs from offering their services in Taiwan without obtaining the necessary approvals from the regulator. These rules were established after major cryptocurrency exchanges in the country formed a self-regulatory association in September 2023, with the goal of supporting the crypto industry and collaborating with regulators.
In November 2023, the FSC granted Cathay Securities the country’s first security token offering license, enabling the firm to issue tokenized green bonds worth $930,000 every six months.
Taiwan will carefully review global trends before making any decisions regarding crypto ETFs.