Taiwan’s Lawmakers Introduce Cryptocurrency Bill to Parliament
The Finance Services Committee (FSC) in Taiwan recently presented a new bill regarding cryptocurrency legislation in the Parliament. The bill dubbed Virtual Asset Management Bill aims to bring more financial protection for the consumers and introduced specified legislation for the sector.
On this account, the legislators in the country presented the bill for further deliberation and approval. The bill consists of 30 pages calling for moderate demands from the industry participants and stakeholders. At the same time, the bill also seeks to implement obvious obligations on Virtual Assets Services Providers (VASPs).
One such demand is the separation of consumer funds from company reserves. In this manner, the company is able to establish internal management practices and auditing standards. At the same time, the bill directs the firms in the industry to join a local trade association.
Relaxed Legal Requirements for Stablecoin Issuers
In contrast to crypto regulatory frameworks issued by EU and Hong Kong legislators, the Taiwanese bill concerning crypto legislators does not implement stringent rules for stablecoin issuers.
In accordance with the bill, the stablecoin issuers are not under legal obligation to maintain 1:1 ratio in backed assets. However, the bill does not address the topic of algorithmic stablecoins. However, the bill assigns the responsibility of advertisement laws to a competent authority.
Legal Penalty for Unregistered Crypto Firms
Furthermore, the bill seeks to introduce a fine on VASPs that are operating without a license. Unregistered firms can get a fine of at least million Taiwanese dollars or $60,000 and at most 20 million TWD or $600,000. The firms in the sector operating in Taiwan will have 6 months to acquire a practice license when the bill is enacted.
The FSC also issued industry guidelines for VASPs in September. On this account, VASPs prohibit foreign companies from offering their services in Taiwan without acquiring permit from the regulators.
Crypto Firms in Taiwan to Create a Self-regulatory Association
Cryptocurrency firms in Taiwan have created a self-regulatory association. There are 9 cryptocurrency exchanges in the preparatory group.
The bill also declares crypto derivatives as standalone investment products that do not fall under the preview of traditional financial investments such as perpetual contracts. This assertion paves the way for crypto-specific regulations in later entries in the draft.
The association was created by three exchanges namely BitoGroup, Ace Exchange, and MaiCoin Group. On this account, Wang Chenhuan, the president of Ace Exchange, told the media that the association is like a cooperative society and beacon.
It brings clarity for the companies operating in the industry by establishing standards and creating consensus while at the same time granting a voice to its participants. In this manner, the sector is able to comply with regulatory requirements and also has the power to negotiate with legislators.
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