- Taiwan Financial Supervisory Commission held a public hearing for the crypto industry and announced a draft release of guiding principles.
- The regulator received inputs from exchanges like Binance on anti-money laundering.
- The FSC has plans to ban offshore crypto exchanges if they fail to comply with the regulator’s requests.
Taiwan’s Financial Supervisory Commission (FSC), the island’s top financial regulator, held a public hearing for the crypto industry on Thursday. As reported by the Central News Agency (CNA), the regulator is set to release guiding principles for the management of virtual asset platforms and crypto brokers in Taiwan.
This is a significant development that impacts offshore exchanges and their users since Taiwan has plans to ban exchanges that lack compliance registration.
Also read: XRP price likely to slump as pro-XRP attorney Deaton analyzes the Howey memo and Hinman speech
Offshore crypto exchanges could face ban
Taiwan is making progress in crypto regulation and developing guiding principles for the virtual asset industry. According to a CNA report, the FSC will complete the draft of these guidelines for exchanges and brokers operating in Taiwan by the end of the month.
The rules will act as guidelines while the FSC develops further regulation for crypto. The guidelines will bring clarity to the listing, delisting and issuance of digital assets, strengthen the fairness and transparency of the process and establish a mechanism for hot and cold wallet management for crypto entities, among other measures.
Moreover, the country is contemplating a ban on offshore crypto exchanges that are operating without a compliance registration. Binance has applied for a license to operate in Taiwan and the exchange offered its expertise in anti-money laundering to the regulator at the hearing held on Thursday.
Cryptocurrency metrics FAQs
What is circulating supply?
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
What is market capitalization?
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
What is trading volume?
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
What is funding rate?
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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