Taiwan has joined the list of countries to regulate cryptocurrency activities, as it recently announced the creation of a regulatory body to oversee the cryptocurrency industry.
The Financial Supervisory Commission (FSC) will be the main overseer of the crypto industry, according to the head of the regulator, Huang Tien-mu, who made the announcement on Monday.
The move is expected to provide a legal framework for crypto activities, which will help protect investors, mitigate fraud, and combat illicit activities such as money laundering.
The FSC’s role in Taiwan’s cryptocurrency regulation
The FSC is Taiwan’s primary financial regulator and oversees banking regulation, securities, and futures, as well as anti-money laundering initiatives.
With the rise of cryptocurrencies, the FSC has recognized the need to regulate the industry to ensure that it operates in a safe and secure manner.
The FSC will initially focus on payments and transactions, but it will not cover NFTs or “non-fungible tokens,” which are still emerging as an asset class.
According to Huang Tien-mu, the FSC will be discussing the details of the new regulatory body with other government departments, as well as “self-discipline norms” with relevant industries.
The self-discipline norms will set out the standards that the industry will be expected to follow to ensure that cryptocurrency activities are conducted in a fair and transparent manner.
The creation of a cryptocurrency regulatory body in Taiwan is expected to have a significant impact on the industry. It will provide a legal framework for cryptocurrency activities, which will help protect investors, mitigate fraud, and combat illicit activities such as money laundering.
It will also provide a level of certainty for businesses that operate in the industry, which could encourage more investment in the sector.
According to CoinDesk, the FTX exchange had one of the largest user bases per capita in Taiwan, which highlights the importance of cryptocurrency regulation in the country.
The collapse of FTX in November 2022, which caused a ripple effect throughout the cryptocurrency industry, brought a sense of urgency to cryptocurrency regulation in Taiwan.
Regulating NFTs
While the FSC will initially focus on payments and transactions, it will not cover NFTs or “non-fungible tokens,” which are still emerging as an asset class.
According to officials from XREX, a Taipei-based TradeTech fintech, the FSC will likely require more time to develop a proper set of NFT classification guidelines.
XREX officials called for the virtual asset service provider industry to work with the FSC to define regulatory operations and to help form an industry self-regulatory body to help develop a set of rules. This would provide clarity on the regulatory framework for NFTs and help prevent fraud and other illicit activities.
Taiwan’s move to establish a regulatory body to oversee the cryptocurrency industry is a significant development that will provide a legal framework for cryptocurrency activities, protect investors, mitigate fraud, and combat illicit activities such as money laundering.
