Taiwan’s new president, a blockchain fan, is already setting up new crypto rules

Taiwan’s new president, a blockchain fan, is already setting up new crypto rules
Lai Ching-te, Taiwan's newly elected president, is poised to introduce crypto regulations. Photo credit: EyePress News/Shutterstock
Asia Dispatch
  • Lai Ching-te plans to set consumer protection standards for crypto firms on the island nation.
  • Taiwan's reputation as 'scam island' is cranking up the pressure on the digital assets sector.
  • In other news: Chinese finance professor tries to explain Beijing's crypto crackdown.

Taiwan’s Democratic Progressive Party won its third election in a row last weekend. The China issue was always going to overshadow the vote, but what does the election of Lai Ching-te mean for crypto?

A Harvard-educated physician, President-elect Lai Ching-te has touted the benefits of both AI and blockchain technology.

His party started doing the groundwork for cryptocurrency regulation late last year with the introduction of a digital asset bill, which passed its first review in the Legislative Yuan at the start of November.

It lays out minimum standards for exchanges and strengthens consumer protection, which has been the norm in crypto regulation across Asia.

Stay ahead of the game with our weekly newsletters

Scam island

Neither of Lai’s rivals were particularly anti-blockchain or crypto.

Ko Wen-je of the Taiwan People’s Party had backed the idea of using blockchain to make election funding more transparent, while the Kuomintang’s Hou Yu-ih once planned to make New Taipei City a blockchain powerhouse.

But there’s increasingly little tolerance for crypto crime. And it’s been booming.

During the election campaigning, Hou, a former police officer, called for a crackdown on fraud, including those using cryptocurrencies.

Join the community to get our latest stories and updates

Taiwan has been referred to as “scam island” — including by Hou — for its skyrocketing levels of telecom fraud and comparatively lenient punishments for perpetrators.

Deepfakes

The number of fraud cases reached a 10-year high under the Democratic Progressive Party, but Lai has also vowed to crack down.

Meanwhile, in November deepfake AI videos began appearing on social media of Lai himself and president Tsai Ying-wen telling people to invest in crypto (similar videos of Singaporean prime minister Lee Hsien Loong would also emerge the following month).

Clearly, crypto has a serious image problem in Taiwan as a new president takes charge.

And dozens of people were arrested across the country for illegally betting on the outcome of the elections using crypto betting platform Polymarket.

Then there was the arrest of Ma Chih-wei, a People’s Party candidate for Taiwan’s Taoyuan City legislative committee. She was detained after she allegedly received more than $30,000 in Tether from China to run in the elections.

Clearly, crypto has a serious image problem in Taiwan as a new president takes charge.

In more news: Defending China’s crypto stance

It may not be easy to find those who defend China’s draconian policies on the crypto market — or, at least, not easy outside of China.

But this week at a conference in Munich, Zhang Xiaoyan, a finance professor at top Chinese university Tsinghua in Beijing and associate dean of the People’s Bank of China School of Finance, offered a cautious explanation for why the government has outlawed crypto speculation and Bitcoin mining, among other restrictive policies.

A UN report earlier this week said that the key driver was cracking down on its use by organised crime.

“People don’t have enough financial literacy,” she said at the conference. “They don’t know best to manage their wealth.”

She continued, “We really worry about retail investors. When you give them a lot of leverage, give them assets they don’t know very well, sometimes they don’t know how to use it. They end up with excessive risk taking, which is eventually hurting their long-term growth.”

Got a story about crypto and blockchain in China? Contact me at callan@dlnews.com