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The Taiwan Crypto Association (TCA) recently announced that it has established a formal communication channel with the Virtual Asset Authority (VAA), the Central Bank of El Salvador (BCES) and the Presidency of El Salvador to promote cooperation and exchanges between the two countries in the field of cryptocurrency. TCA said that the association will provide technical and policy support to El Salvador to help it establish a sound virtual asset regulatory framework.
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El Salvador is the first country in the world to make Bitcoin a legal tender. The country passed the Bitcoin Law in June 2023, stipulating that from September 7, all economic entities must accept Bitcoin as a payment method. The bill aims to promote financial inclusion, create jobs, increase economic growth and attract foreign investment.
However, El Salvador's Bitcoin bill has also caused some controversy and challenges. On the one hand, institutions such as the International Monetary Fund (IMF) have questioned the legitimacy, feasibility and risks of the bill. On the other hand, there have been some voices in El Salvador opposing the Bitcoin bill, arguing that the bill lacks democratic procedures, transparency and social consensus. In addition, El Salvador has also encountered some technical and operational difficulties in the process of implementing the Bitcoin bill, such as the failure of the Bitcoin wallet Chivo, cyber attacks, and user complaints.
To address these issues, TCA called on El Salvador to establish a Virtual Asset Agency (VAA) to ensure regulatory capacity and consumer protection. TCA said that VAA will be responsible for formulating and enforcing laws, rules and standards related to virtual assets, as well as supervising and managing Virtual Asset Service Providers (VASPs). TCA believes that VAA will help regulate cryptocurrency transactions, prevent money laundering and terrorist financing, protect user privacy and rights, and promote innovation and competition.
TCA also said that the association will share its experience and expertise in the field of virtual assets with El Salvador, including the Regulations Governing Virtual Asset Service Providers issued by Taiwan’s Financial Supervisory Commission (FSC) in 2020, and the Taiwan Crypto Self-Regulatory Code formulated by TCA itself. TCA said that these documents can provide reference and reference for El Salvador to establish a virtual asset regulatory framework.
The move by TCA comes as regulators around the world are trying to better respond to the rapidly expanding cryptocurrency industry. Recently, Gary Gensler, chairman of the Securities and Exchange Commission (SEC), said that the cryptocurrency market needs more regulation and called on Congress to authorize the SEC to regulate cryptocurrency trading platforms. In addition, countries such as China, South Korea, and Japan have also stepped up their supervision of cryptocurrencies to prevent financial risks and maintain market order.
Summarize
The establishment of a communication channel between the Taiwan Cryptocurrency Association and El Salvador is a meaningful attempt and an important opportunity. Through this cooperation, the two countries can learn from each other, support each other, and promote each other to jointly promote the development and regulation of virtual assets. At the same time, it also provides a model for other countries and regions to learn from, showing how to use the potential and advantages of cryptocurrency to bring more welfare and value to the economy and society under the premise of protecting consumers and maintaining financial stability.
