Previously, it was rumored that the Financial Supervisory Commission would strictly define "token asset classification," "accounting recognition," "token issuance permits," "related tax laws," and "DeFi" regulatory scope. However, after reviewing the draft, it becomes clear that the draft is almost entirely focused on VASP cryptocurrency trading service providers. Notably surprising aspects include conditions for New Taiwan Dollar stablecoin issuers, limiting issuance to domestic markets, and requiring review for offshore stablecoins listed on Taiwanese exchanges.
TL；DR
- New Taiwan Dollar stablecoin issuance conditions are stringent, almost exclusively for banks, with the current trend suggesting bank involvement. This raises questions about the potential liquidity of bank-issued stablecoins in DeFi.
- All tokens listed on Taiwanese exchanges must undergo review, ruling out meme coins and algorithmic stablecoins. Token listings will be clean and concise.
- 23 existing domestic exchanges must submit new registration applications, with only 4 having applied so far. An additional 6 new operators have also applied. It remains uncertain whether the other 19 will become compliant operators.
- The draft has not yet held a public hearing. The Financial Supervisory Commission hopes to use the public policy online platform for feedback, with the link available here.
Draft Virtual Asset Management Regulations Key Points Summary
Background: To address the rapid development of virtual assets (cryptocurrencies) and associated risks, the Financial Supervisory Commission has drafted the "Virtual Asset Management Regulations" to establish a comprehensive regulatory framework, promote market development, protect trader rights, and foster financial technology innovation.
Regulatory Powers and Penalties:
Financial Supervisory Commission's Powers: The Financial Supervisory Commission has the power to conduct inspections (audit, request information), order improvements, and impose penalties on non-compliant businesses. (Draft Chapter 4)
Penalties: For illegal activities (such as operating without a license, violating asset separation regulations, obstructing inspections, failing to report as required), administrative fines are stipulated (such as fines ranging from NT$300,000 to NT$6 million as mentioned in Draft Chapter 5, with the possibility of consecutive penalties). Serious cases may involve criminal liability.
