Taiwan Sets To Launch ICO Regulatory Framework By June 2019
“Taiwan will soon introduce its clearly defined ICO regulatory framework which should be ready by June 2019”, said Gulixiong, the island’s Chairman of of the Financial Supervision and Management Commission,during a meeting in the Legislative Yuan on Monday.
As ICOs are still operated in murky legal waters and fraud is prevalent, Taiwan’s financial regulators are eager to legalize the space and impose friendly crypto-related regulations, instead of a blanket ban, in a bid to boost the sustainable development of cryptocurrency and blockchain industry in the island.
According to Taiwanese news site ET Today, Gu claimed his agency would assess each ICO issuance on a case-by-case basis to determine if they should be classified as a security or a commodity. “If an ICO token is considered as a security, it should have two characteristics: investment attributes and the liquidity. ”Gu said.
He stressed that if a token’s description falls more in line with that of a security, the Financial Supervision and Management Commission will come up with an ICO issuance standard which is expected to be unveiled before June 2019.
In addition, Li Qinghua, the director general of Taiwan’s Taxation Administration stated at the same meeting that virtual currencies are recognized as virtual commodities rather than a method of payment in Taiwan. To this end, local cryptocurrency exchanges are required to pay tax on gains.
“ Statistics published by Taiwan’s Ministry Of Finance indicates that crypto exchanges have paid 10 million Taiwan Dollar(NTD) in business tax, and 4 million NTD in corporate income tax from 2016 to date.” Li said.
Yang Jinlong, the Governor of the island’s central bank, outlined three major obstacles confronting the cryptocurrency space. They are the high rate of ICO scams, the insufficient support for bitcoin futures and American financial watchdog’s reluctance to approve bitcoin ETFs. In fact, the island’s central bank recently signaled that regulating cryptocurrencies under the existing Money Laundering Control Act could take into effect by the end of the year.
While mainland China escalates crackdown on cryptocurrency trading and ICO activities, Taiwan has seen the influx of crypto funds flowing into its relatively liberal market. And it’s on the way to become a blockchain and cryptocurrency island with sound crypto regulatory environment.