In the aftermath of Binance facing a monumental $4 billion fine for alleged involvement in Hamas financing, Sean Chen, Chairman of Taiwan’s Appacus Foundation, asserts that this landmark penalty underscores the crucial need for legal frameworks in the digital finance realm. Chen, who is also a Taiwanese political figure and financial expert, contends that the incident not only signals the paramount importance of legal structuring in digital finance but also marks the industry’s entry into a new era of legal scrutiny and order.
Expressing dissatisfaction with Taiwan’s lax attitude towards relevant legislation over the past five years, Chen advocates for a robust legal environment for stablecoins. He suggests drawing inspiration from Singapore and Japan’s regulatory experiences and emphasises the necessity for a Taiwanese version of stablecoin, stating, “Let stablecoins have a clear path!”
Appacus Foundation hosted a forum today, focusing on the challenges posed by virtual assets. The event featured a keynote speech by Yosuke Takesawa, Chief Strategist at Japan’s Mitsubishi UFJ Trust and Banking Corporation, delving into Japan’s stablecoin issuance framework. Chen, in his opening address, highlighted the global interest in venturing into virtual assets, citing previous attempts by Facebook with Libra and Paypal, which raised concerns for the U.S. government. He pointed out that Singapore and Japan have taken the lead in legislation related to stablecoins in the Asian region.
Championing the significance of legislation surrounding stablecoins and cryptocurrency, Chen listed three key issues in Taiwan’s digital financial legal framework. These include the challenge of naming, determining the responsible regulatory body, and the insufficient strength of management due to the absence of concrete laws.
Chen critically analysed these issues, noting the progression from the “virtual currency” terminology used two years ago to the present “virtual assets.” He highlighted the ongoing considerations by regulatory authorities regarding nomenclature and expressed concern about the confusion arising from the use of different terms in legal documents.
Chen emphasised the importance of addressing regulatory gaps and determining a governing body for virtual assets, comparing the situation to an unattended child facing hardships. He stressed the need for explicit legal foundations, asserting that relying solely on guiding principles without legal backing could lead to catastrophic consequences in the event of issues arising.
Appacus Foundation observed recent turbulence in the financial development of virtual assets globally. With the international market experiencing regulatory challenges and a surge in financial fraud cases in Taiwan, regulatory authorities are compelled to transition from flexible management approaches to align with global regulatory standards.
The foundation noted that surrounding Asian nations, including Japan, South Korea, Hong Kong, and Singapore, have implemented explicit regulatory frameworks and licensing systems. This proactive stance aims to compete for leadership in the next-generation virtual financial centre. In contrast, Taiwan lacks specific laws and related institutional designs for virtual assets, resulting in a regulatory gap. While this offers flexibility to industry players, it also leads to significant social issues such as inadequate infrastructure for virtual assets and insufficient protection against financial fraud, prompting the foundation to host today’s forum.
As the virtual economy assumes an increasingly vital role in the global economy, the Appacus Foundation forum focused on trends, challenges, and opportunities in the virtual economy. With the rise of AI and Web3 blockchain technologies, the next era of financial innovation is poised to heavily involve the virtual economy.
Through today’s forum, which brought together industry experts, scholars, entrepreneurs, and government officials, the collective aim is to delve into the trends, challenges, and opportunities within the virtual economy. The emphasis is on fostering collaboration and dialogue to address the current challenges facing the industry.