Taiwan to Formally Adopt a Legal Framework for STOs by June
After flirting with the idea of a proper legal framework for STOs, Taiwan has said that that the country plans to formally reveal a legal structure for STOs by June.
The Taipei Times is reporting that STOs will soon be legal in Taiwan. The country’s Financial Supervisory Commission (FSC) will be enacting a new legal framework for the crypto industry in just a few months.
Taiwan has in the past year been no stranger to the STO industry. In fact, the sector has been steadily expanding in the country. For example, Leadbest, the security token issuance company which recently partnered with Polymath, is based in the country. Taiwan is also part of the Asia Blockchain and Crypto Association (ABACA).
New Rules for STOs in Taiwan
According to local reports, although STOs will go legally active soon in the country they will fall under strict regulations. For example, all STOs be limited at first until the FSC can determine their success. During this period, interested issuers can only raised NT$30M (about $1M).
The process will begin slow but is expected to ramp up as STOs show more promise in Taiwan. Blockchain-based equities will also be excluded since they technically fall under the country’s Company Act. However, the FSC hopes that token-based equities will be available in due time.
In a phone interview with the Taipei times, the Deputy Director of the Securities and Futures Bureau of Taiwan said the following about the new legal framework:
“The securities tokens are issued in foreign countries as digital assets based on blockchain technology. So far, holders of securities tokens enjoy certain ownership in the issuing companies and can receive dividends as if they are investing in stocks. They can also receive interest payments from the sale of securities tokens as with corporate bonds.”
Overall, it looks like the FSC is starting cautiously but the future for STOs looks bright in Taiwan.
Will Taiwan become a hub for STOs? Let us know your thoughts below.