Taiwan is planning to make the Financial Supervisory Commission (FSC) the main regulator overseeing the crypto sector in the country, according to a Bloomberg report on Monday that cited a person familiar with the matter.
Taiwan to Announce FSC as Main Crypto Regulator
The report stated that the announcement of FSC as the major regulator of the sector could happen as soon as the end of this month.
“Taiwan’s cabinet and the FSC have been working with other government departments and talking to industry representatives to work out a concrete plan,” Bloomberg stated.
If the reports are accurate, this will be the first time Taiwan will be officially appointing a regulator for the crypto industry and shifting from a “hands-off approach” regarding the market amid a tumultuous year.
Huang Tien-mu, the chairman of FSC, stated that the Commission would follow the cabinet’s instructions on the next steps, including the timing of any announcement. He added that FSC would likely work with industry players on “self-regulation measures” after the main regulator and framework for regulations are announced.
Tien-mu also noted that the Commission would focus on regulating “payment and trading-related” crypto assets, and would leave the rest to other government departments. He revealed that non-fungible tokens (NFTs) would not be under FSC’s supervision.
Currently, in Taiwan, no legislation directly applies to crypto. The FSC only requires registered crypto exchanges to comply with its anti-money laundering provisions.
Crypto Exchanges Responds
The report stated that in response to the development, major crypto exchanges are seeking support from local companies for less stringent regulation. According to the report, a joint paper sent from Binance Holdings, Matrixport Technologies, and Woo Network LLC on Saturday is calling for a more friendly regulation that provides “clarity” to entities operating in the country.
The exchanges are looking to gather more local support before submitting the paper to officials in the country, according to the report.
“From our observations, some markets that tried to regulate virtual assets under existing financial rules and categorizations experienced great difficulty as the rules lacked clarity and made it very confusing for business operators, authorities and customers,” the paper said.
The paper suggests that Taiwan should take a similar regulatory approach to the EU and Dubai, where the government set up “independent and designated departments” for crypto assets separate from traditional finance.
The paper added that tougher regulations could lead to financial losses for investors already participating in “global market trading” and also force crypto trading activities to go “underground,” affecting industry growth and “regulatory progress.”
Meanwhile, crypto exchanges that provide trading services will be among the first to be regulated under the FSC, as the financial regulator is already in discussions with the exchanges, according to the report.
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