Since the advent of Bitcoin, Taiwan has wondered whether to regulate or liberalize cryptocurrency, the digital tokens backed up by transaction ledgers rather than monetary authorities. Regulation could head off financial crimes and protect established banks worried about a loss of business. Liberalization would nurture a domestic financial technology sector, timely as Taiwan’s signature high-tech hardware gives up ground to foreign firms.
Today the government and ruling party-dominated legislature show early signs of veering toward liberalization. That course would mean making it easier to trade Bitcoin, Litecoin and other cryptocurrency, good for a fintech sector that has begun flourishing even without clear rules.
“There needs to be a whole new set of frameworks and narratives to position crypto and its underlying technology blockchain as the strength that Taiwan can develop,” says Jason Hsu, a minority party lawmaker who is pushing regulators and other legislators to approve a “playbook” on cryptocurrency. “Once that idea is instilled in their minds, I think we will see a quick switch happening.”
History of hesitation
Taiwan now takes a “neutral” view on cryptocurrency, a publicist with government regulator the Financial Regulatory Commission said for this post Thursday. But others in government hope to make more of it, Hsu says based on chats with high-level officials and debates in parliament.
It’s illegal to solicit money from the public via digital security tokens and effectively impossible to open a digital currency bank account, Hsu has found.
Early signs of change
In October 2017, today’s commission Chairman Wellington Koo pledged at a joint cabinet-parliament session to pursue a friendlier “stance” on development of cryptocurrency and its public ledger blockchain, the FinTech Law Blog reports.
Balance between risk and opportunity?
Guidelines in Taiwan might seek a balance between cryptocurrency “innovation” and protecting consumers from “predatory practices,” Eastwood suggests.
“As with any new technology, there are always people who want to see how far they can take the concept,” he says. “Volatility for cryptocurrencies has been a concern for a long time, and governments are concerned about some of the pump-and-dump tactics that they’ve been seeing.”