Taiwan is moving forward with a regulatory framework that could see the digital industry flourish. Photo: Getty Images

In Asia, regulation and acceptance of crypto is advancing quickly. Taiwan is the latest nation in the region to embrace the embryonic industry with the drafting of new initial coin offering regulations and a new business category for crypto startups.

Last week Taiwan’s “crypto congressman”, Jason Hsu, published a list of recommendations for new policies to assist crypto startups. Included was one that would involve the Ministry of Economic Affairs (MOEA) to create a new framework for security tokens and a new category for businesses in this sector.

He called for the legislature’s Finance Committee to issue new guidelines for initial coin offerings (ICOs) after it said it would be working on new regulations. According to local media, Financial Supervisory Commission chairman Wellington Koo told the committee that “national standards” for ICOs would be implemented by mid-2019.

Chinese Nationalist Party Legislator William Tseng questioned the methods used by ICOs to generate funding. This typically involves the company or team posting a “white paper” outlining the technicalities of the project and token, its usage and predicted growth. Citing data from ICO advisory firm Satis Group, Tseng said that over 80 percent of ICOs have been identified as scams.

Koo said that the commission would regulate ICOs but also added that tokens used for purchasing goods or services do not fall under the securities classification and therefore would not be regulated in the same manner. “The more we regulate, the more this new economic behavior wanes,” he added.

The commission has no intention of curbing the creativity and productivity associated with crypto currencies providing they are not used as securities. Crypto currencies are generally regarded as commodities or assets by Taiwanese lawmakers. Central bank Governor Yang Chin-long confirmed this, telling the committee that crypto currencies have “no intrinsic value”.

Jason Hsu wants this framework to go further which would require the MOEA to develop new consumer protection and taxation guidelines according to reports. A separate specific proposal for securities tokens using the same crowdfunding methods, called STOs, based on the US Howey Test,was also suggested.

Unlike China and India which continue to clamp down on all forms of digital assets, Taiwan is moving forward with a regulatory framework that could see the industry flourish on the island. South Korea, which is home to some of the biggest crypto exchanges by trade volume, has also recently said it was time to consider lifting the ICO ban and introducing regulations.