Taiwan To Introduce Cryptocurrency Regulations To Curb Money Laundering

  • Taiwan is set to introduce regulations on cryptocurrencies by November 2018.
  • Tteir goal will seemingly be to curb money laundering, and not to clampdown on the industry.

Taiwan’s government is set to introduce a new regulatory framework for cryptocurrencies later this year. The move is set to prevent money laundering, and won’t seemingly be the start of a clampdown, according to local news outlet Asia Times.

Qiu Taisan, the country’s Justice Minister, called for the regulations to be in place by November this year, before the Asia Pacific Group on anti-money laundering visits Taiwan to evaluate its existing anti-money laundering (AML) rules.

According to reports, Taiwan’s central bank, the Ministry of Interior, and its Bureau of Investigation are set to determine how cryptocurrencies like bitcoin are going to be regulated in the country.

Gu Lixiong, chairman of Taiwan’s Financial Supervisory and Management Commission, revealed that as part of the country’s AML framework, banks have been told to label bitcoin-related accounts as “high-risk clients” by the Financial Services Coalition (FSC). According to the Asia Times, financial institutions in the country were asked to warn their customers about the potential risks of investing in cryptocurrencies.

Former FSC chairman Wellington Koo was notably opposed to harsh measures against cryptocurrencies, as he believed these would hurt the industry in the country. He was quoted as saying:

“Just because China and South Korea are banning doesn’t mean that Taiwan should follow suit—there is a huge opportunity for growth in the future. We should emulate Japan, where they treat cryptocurrency as a highly regulated, highly monitored industry like securities.”

Wellington Koo

What will come of Taiwan’s regulations is unclear. While countries like Japan and Singapore are Asian hubs for cryptocurrency startups, countries like China, India, and recently Thailand haven’t been exactly crypto friendly.

As covered, Thailand’s Finance Ministry recently revealed cryptocurrency investments will be taxed with a 7 percent value added tax (VAT), while returns will be hit with a 15 percent capital gains tax. The country’s cryptocurrency enthusiasts called for the government to review its approach, but their attempt seemingly failed.

G7: Facebook's Libra Shouldn't Be Launched Until Its Risks Are 'Adequately Addressed'

A report from the Group of Seven Nations (G7) has revealed some of the world’s biggest economies believe Facebook’s cryptocurrency Libra shouldn’t be launched until its potential risks as “adequately addressed.”

The report, seen by the BBC, reportedly outlines major risks posed by cryptocurrencies like Libra, and notes its backers must be legally sound, protect consumers, and make sure the cryptocurrency isn’t used to fund terrorism or launder money.

According to the BBC it doesn’t single out Libra itself, but instead refers to “global stablecoins” with the potential to “scale rapidly.” Some of the outlined risks include a potential threat to financial stability of users suffer from a sudden “loss of confidence in Libra,” as well as being a threat to policymakers’ measures.

The report, which is set to be presented to finance ministers at the IMF annual meeting, reads:

The G7 believe that no stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks are adequately addressed

The document further adds that even if the Libra Association manages to mitigate the risks listed in it, this still doesn’t guarantee “regulatory approval for a stablecoin arrangement.” JP Morgan’s JPM stablecoin is reportedly also going to be examined.

In a separate document the Financial Stability Board (FSB), which coordinates rules for G20, noted stablecoins like Libra pose various challenges to financial stability and investor protection, among others.

In the document Randal Quarles, the chairman of the FSB, said these challenges should be “assessed and addressed as a matter of priority.” The BBC’s report comes shortly after Mastercard, Visa, and eBay join PayPal in leaving the Libra Association.

David Marcus, Facebook's executive leading the stablecoin project, rated to the news on social media:

 

 

Notably, the G7 report also acknowledges cryptocurrencies can potentially provide a faster and cheaper way to move money, as the current system can be “slow, expensive and opaque.” The first Libra Association board meeting is set to take place in Geneva on Monday.

Featured image via Pixabay.