The Financial Supervisory Commission (FSC) in Taiwan is set to become the regulator for cryptocurrency with the introduction of special legislation. Huang Tien-mu, the head of the FSC, confirmed this during a hearing about global banking stability.
The industry is welcoming the news as it believes that regulation will help it to grow. Wayne Huang, CEO of XREX, said that the next step would be for the virtual asset service provider industry to work with the FSC to define regulatory operations
One of the first steps in this collaboration is to form an industry self-regulatory body to help develop a set of rules. However, the FSC won’t be regulating non-fungible tokens (NFTs) as they are still emerging as an asset class, and it’s too early to regulate them.
Taiwan has two financial regulators, the Central Bank and the FSC, with the latter having a broad remit over banking regulation, securities and futures, and anti-money laundering.
Taiwan has historically taken a hands-off approach to cryptocurrency regulation, only regulating the asset class under the framework of controlling money laundering. However, the collapse of FTX, a popular cryptocurrency exchange, added a sense of urgency to Taiwan’s regulatory push.
Authorities approved 24 crypto platforms under the island’s AML compliance system last September. The introduction of the new legislation is expected to strike a balance between experimentation and investor protection.
An initial framework for the law is expected by June, with an initial draft for later this year.
