Taiwan has taken a significant step toward regulating the cryptocurrency industry as a draft crypto act passed its first reading at the Legislative Yuan, the nation’s parliament. The proposal, jointly put forth by Yung-Chang Chiang and 16 other lawmakers, is aimed at providing a legal framework for the virtual asset sector.
Yung-Chang Chiang, one of the proponents of the special act, expressed his optimism about the progress. He noted that “after the first reading of the bill, discussions on the regulatory framework for the virtual asset industry have progressed to the next stage.” Chiang also called upon the Financial Supervisory Commission (FSC) to contribute their draft bill to facilitate consensus-building among various sectors of society.
This move comes in the wake of guidelines issued by Taiwan’s FSC, encouraging the industry to establish self-supervisory rules through a potential industry association. However, Chiang highlighted the limitations of such voluntary measures, explaining that the special law would empower regulatory authorities to impose penalties on operators who violate self-regulation rules.
The proposed crypto law will mandate all cryptocurrency platforms operating in Taiwan to seek a permit. Failure to do so could lead to regulators ordering the cessation of their operations. While no specific timeline has been set for the second reading of the bill, it’s unlikely to occur by the end of January 2024, given that the current legislative tenure in Taiwan ends in January.
Presently, Taiwan’s cryptocurrency industry remains largely unregulated, with anti-money laundering compliance being the primary requirement for virtual asset service providers, introduced by the FSC in July 2021.
Circle’s Innovative ‘Points-to-Crypto’ Service
In related news, United States-based stablecoin issuer Circle has formed a partnership with Taiwan’s second-largest convenience store chain, FamilyMart, and a local crypto exchange, BitoGroup. This collaboration aims to introduce a “Points-to-Crypto” service on the FamilyMart app, allowing customers to convert loyalty points into a Circle-issued USD Coin.
This move is expected to democratize access to cryptocurrencies, leveraging the popularity of loyalty point systems in Taiwan, where a large percentage of users engage in point accumulation and redemptions.FamilyMart’s FamiPoints and BitoGroup’s user base are set to play a significant role in this initiative, offering millions of potential users the opportunity to engage with digital assets.
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