Taiwan lawmakers are making strides toward introducing a dedicated crypto asset act aimed at regulating cryptocurrency firms.

Yung-Chang Chiang, a member of Taiwan's parliament, stressed the need for such a law, citing the unique characteristics of the cryptocurrency asset class that diverge from traditional financial products.

While the Financial Supervisory Commission issued guidelines for the crypto sector to self-regulate, Chiang argues that a special law is necessary to give regulators the authority to enforce penalties on operators who violate these self-regulation rules.

The proposed law would require all crypto platforms operating in Taiwan to apply for a permit, with the option to cease operations for non-compliant entities.

Currently, Taiwan requires virtual asset service providers to comply with anti-money laundering laws, but the industry remains largely unregulated.

Chiang acknowledges that passing the special law during the current legislative session is unlikely due to other priorities and an upcoming election.

Taiwan's FSC may also propose its version of the crypto law, potentially in mid-2024.

Banking Challenges

During the hearing, Damien Ho, representative of global partnerships of Binance, noted that many crypto platforms in Taiwan still struggle to access suitable banking services, despite efforts by the FSC to encourage banks to treat them less riskily.

Ho suggested that the Taiwanese government should encourage private or public banks to become more crypto-friendly to foster regulated and effective growth for crypto businesses.

Binance, the world's largest crypto exchange, is reportedly seeking registration in Taiwan for AML compliance.

While Binance is not currently regulated in Taiwan, it has a local entity approved by the government.