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NT$600mln Raised in a Day, Could Taiwan Back to its Heyday via Blockchain?

“The rise of digital currency and blockchain technology is an opportunity for Taiwan,” said Taiwan legislator and Congressman Jason Hsu. Given the nickname of “Crypto Congressman” by Vitalik Buterin, Hsu is active in pushing cryptocurrency and blockchain in Taiwan.

Taiwan, a has-been member of “Four Asian Tigers” who has created the miracle of over 9% annual economic growth for 30 consecutive years, has been on a downward slide since the dotcom bubble burst in 2000, struggling to establish a foothold in Asia with electronics manufacturing.

As blockchain is now considered a significant technology trend, the region does not want to be lag behind on it and has been making its efforts.

As the supplier of crypto miner maker giants Canaan and Bitmain, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest chip contract manufacturer based in Taiwan, has taken considerable profits from crypto mining. Chips produced by TSMC account for 56.1% of the global share, supporting big names including Apple, Qualcomm, Bitmain and Canaan.

According to latest figures from its financial statement, TSMC’s net income in Q2 totaled NT$72.3 billion (roughly US$2.36 billion), up 11.2% from last year, of which most were contributed by orders from crypto miner makers.

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Apart from traditional manufacturers, internet giants in the region are also stepping up their deployment in blockchain.

Earlier in 2016, technology giant Microsoft has partnered with industry firm AMIS and The Technology Research Institute of Taiwan (ITRI), together with a number of regional banks in the Taiwanese financial market, to form a blockchain consortium.

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Taiwan has long been regarded as having abundant technology development energy in the blockchain sector. The Ethereum community in Taipei plays an important role in it. Ethereum founder Vitalik Buterin once tweeted speaking highly of Ethereum community activities in Taipei, “It’s hard to see other communities that are so focused on the developer culture”.

When start-ups on the island struggled to raise capital, blockchain financing presents another picture. According to blockchain transaction database Elementus, Taiwan so far has contributed approximately 0.06% to global ICO fundraising activity.

This May, BitoEX, a Taiwanese cryptocurrency platform that launched its ICO (Initial Coin Offering), claimed to have raised $10 million in 5 hours and sold out 175 million tokens (BITO) in 26 hours, that’s worth NT$650 million calculated by market price at then.

In the recent Seminar on Blockchain Industry held by the New Taipei City, the mayor stated a Blockchain Push Office would be established later this year.

In contrast to the booming development of the blockchain industry, Taiwan’s regulators are cautious on cryptocurrency like in other regions.

Taiwan has been criticized by the international tech community for its lack of fintech regulation. Regarding regulations on the nascent crypto sphere, there is currently no detailed regulatory policy for cryptocurrencies.

Regulators call to regulate bitcoin under anti-money laundering laws, and ‘control mechanisms’ would be established prior to the Asia Pacific Anti-Money Laundering Organization in Taiwan at the end of November.

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Put other factors aside, there has always been an ambiguous relationship between the Mainland China and Taiwan, as well as in the blockchain sector.

A plurality of investors and entrepreneurs from mainland China has set their sights onto Taiwan since regulators in mainland China issued a ban on initial coin offerings (ICOs) and cryptocurrency trading last September.

Following Beijing’s ban that all venues are prohibited from hosting crypto-related promotions and some crypto-related social media accounts were blocked this August, more crypto-related media and start-ups has been reported to join the Exodus to Taiwan.

On September 6, a big fund established by Xue Manzi, a notable Chinese-American angel investor and online social commentator, along with a group of crypto exchanges and media from mainland China, held a blockchain and crypto forum in Taipei, which was hosted by famous Taiwanese entertainer Jacky Wu. Of the 23 invited guests announced, only two are Taiwanese. For this, local media worried these firms might also bring the much-maligned crypto scams troubling the mainland regulators to Taiwan.

The crypto mining giant Bitmain is also busy making deployment in Taiwan. With more than 100 employees, its Taiwan branch is mainly engaged in research and development on artificial intelligence (AI).

The crypto fever has been catching on in Taiwan, while stringent regulation on it like that in mainland China may hinder the further development of this nascent sector. It remains to be seen whether Taiwan can seize the opportunity to regain the glory of the has-been “Asian Tiger” by taking advantage of blockchain.

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