Taiwan Will Introduce New Virtual Currency Draft Law In September: Regulator

Taiwan is set to propose a draft law targeting digital currencies later this year, a new report revealed, citing the self-governing island's financial regulator.

Chairman of Taiwan's Financial Supervisory Commission (FSC), Huang Tianmu, on Monday said the commission will introduce a draft law on virtual currencies in September amid a rise in fraud groups targeting digital assets, local newspaper the United Daily News reported.

Huang said during a finance committee meeting that "virtual currency assets are quite risky and speculative," and intrinsic value of such assets is highly volatile, as per a Google translation of the report.

The FSC chair went on to warn investors against investing in overseas digital asset dealers or "unapproved platforms." He also noted that there will be serious consequences and administrative penalties on merchants that attempt to defraud investors.

This comes several months after Taiwanese lawmakers introduced the Virtual Asset Management Bill, which has since passed its first parliament reading, as per multiple outlets.

The bill, according to a translation by Cointelegraph, looks to better protect customers and "properly supervise" the emerging industry that has gained traction in various countries and jurisdictions.

The legislators propose that virtual asset service providers (VASPs) operating without a license be fined no less than two million Taiwanese dollars (approximately $63,000) and no more than 20 million TWD (approximately $633,000).

Ahead of the draft law's release, cryptocurrency firms in Taiwan are also making their own moves in a bid to ensure that they comply with regulations while also working out possible concessions with the Taiwanese government and regulator should new laws be a bane to crypto market growth.

In September last year, Taiwan's digital asset platforms announced the founding of an industry association as led by three of the major cryptocurrency firms in the island: MaiCoin Group, Ace Exchange and BitoGroup.

The association, called the Taiwan Virtual Asset Platform and Transaction Business Association, said it aims to "effectively integrate virtual currency industry and self-compliance, and establish and effective and smooth communication channel with the government."

It is worth noting that Taiwan's new leader, Lai Ching-te, is said to be an advocate of blockchain technology. When he was still vice president in 2021, he pledged to advance Taiwan's artificial intelligence and blockchain industries, encouraging the cultivation of talent in the said sectors and expressing his support for innovation. It remains to be seen how Lai's openness to innovation will affect the self-governing island's cryptocurrency market.