In the profound wave of crypto normalization, Taiwan seeks to have a legislation addressing offshore exchanges by November 2023. Stories have circulated that Yung-Chang Chiang, a dignitary from the Legislative Yuan of Taiwan, plans a draft design for a special law available for parliament scrutiny within that timeframe. The driving force behind this legislative move is a perceived necessity to provide adequate regulation to emerging crypto businesses. Unsurprisingly, this is triggered by heightened concerns over offshore markets’ activities and the need to avoid potentialities for “regulatory arbitrage.”
Chiang echoes sentiments that crypto assets bear significant differences from traditional financial instruments. There is a prevalent consensus that a unique legislation is paramount to govern this burgeoning industry. This forward-thinking move has been catalyzed by a recently held public hearing consisting of digital asset providers, scholars, and other key stakeholders in the sphere.
Taiwan’s Financial Supervisory Commission (FSC) is also proactively participating in this drive. They’ve recently released a collection of guidelines intended to bolster protection for cryptocurrency investors. One eye-catching guideline mandates complete segregation between exchange treasuries and customers’ assets. Furthermore, mechanisms have been put in place to cull any improprieties in the listing and delisting of digital assets.
There’s also an intriguing provision that keys on trans-border business operations. Specifically, foreign virtual asset service providers are handicapped from delivering services within Taiwan. These providers have to adhere to approval requirements of local regulatory watchdogs. This regulatory framework seems in line with dynamic nature of cryptocurrency, a nod to its reputation as the capital of technological advancements in Asia.
However, this seemingly stringent clampdown on crypto regulation is not without its critics. Some may argue it stifles the organic growth and spontaneous nature that characterizes the crypto realm. Moreover, while regulation can protect ill-informed investors and deter fraudulent schemes, over-regulation hinders productive innovation and scares away potential venture capitalists.
To strike a balance, market operators in Taiwan have preemptively formed an association to safeguard and advocate for industry interests. Whether the oncoming legislation will favor the aspirations of this association, industry innovators or the skeptics remains to be seen.
Source: Cointelegraph
