2025 Future of Virtual Assets—Derivatives Regulation Policy Forum
With the Taiwanese government actively promoting a special law for virtual asset services, the draft of this special law will be submitted for review this year, marking a new development stage for Taiwan's virtual asset industry. The industry has high expectations for introducing cryptocurrency derivatives such as futures and options, but there are still many questions about how new regulations will govern these products. The Bitcoin and Virtual Asset Development Association held the '2025 Future of Virtual Assets—Derivatives Regulation Policy Forum' today.
This forum gathered representatives from the virtual asset industry, operator associations, academia, and government departments to jointly examine and discuss the relevant clauses regarding derivatives in the draft of the special law. The forum delved into business and legal practice aspects to seek the best strategies for the development of Taiwan's virtual asset derivatives industry.
During the forum discussion segment 'Virtual Asset Derivatives: Taiwan's Legal Blueprint and Development Opportunities', Bitcoin and Virtual Asset Development Association Chairman Xu Peiling moderated and invited several industry and academic leaders for in-depth discussions, including Hayek Technology co-founder and Business Director Wen Hongjun, MaiCoin Group founder and CEO Liu Shih-wei, BitoPro Group founder and CEO Zheng Guangtai, and Professor and Director of the Graduate Institute of Financial Management at Citibank Chen Jinji.
Enhancing Taiwan's Competitiveness, Striving for the Global Top Ten
According to a report by market research firm Market Research Intellect, the derivatives trading market for cryptocurrencies reached $10.5 billion in 2024 and is expected to grow to $30.2 billion by 2033, with a compound annual growth rate of approximately 12.46%. The report indicates that as policies become clearer in various countries and the participation of professional institutions increases, the derivatives market is growing steadily and is expected to become an important driver for the mainstreaming of the virtual currency industry.
During the forum, experts unanimously agreed that Taiwan ranks among the top 20 economies globally; however, it only ranks in the top 40 for capital market derivatives trading volume. MaiCoin Group CEO Liu Shih-wei pointed out that if the same vision could be projected into the virtual asset field, especially cryptocurrencies and their derived stablecoins and RWA (Real World Asset Tokenization) products, Taiwan has the potential to rank among the top ten in the global cryptocurrency market within the next five to ten years.
This not only requires the government to expand regulations on derivatives based on fiat to cryptocurrency exchanges but also to recognize that the trading volume of derivatives is usually 3 to 5 times that of spot trading. By developing a diverse range of derivatives, Taiwan can significantly enhance industry dynamism, attract talented individuals, and expand the profit margins that the industry deserves.
Liu Shih-wei believes that with increasingly stringent regulations and changes in the macro environment, compliance and operational costs continue to rise. Local compliant operators, under increasing cost pressures, urgently need to develop derivatives business as a new operational momentum for sustainable management. If the domestic trading environment is limited to the spot market, funds with a demand for derivatives investment will shift to overseas platforms, accelerating capital outflow and increasing the government's challenges in cash flow tracking and anti-money laundering.
Current Situation and Challenges: The Dilemmas Faced by Taiwanese Operators
Despite strong market demand, Taiwanese cryptocurrency operators face numerous challenges. BitoPro CEO Zheng Guangtai mentioned that when the platform was first established, derivatives trading was already prevalent in the mainland Chinese market, while Taiwan initially preferred spot trading. However, today, seven to eight percent of customers choose to engage in leveraged trading after entering the exchange, indicating a continuous rise in demand for derivatives.
One of the main reasons for this phenomenon is the strict restrictions on capital inflows and outflows imposed by Taiwan's current regulatory environment, leading to continuous capital outflow. In addition, CEO Zheng Guangtai pointed out that most Taiwanese operators have low transaction fees but face high personnel and risk control costs, which also makes it challenging for many operators to develop locally.
Moreover, the high volatility of the spot market, combined with the unique high volatility characteristics of cryptocurrencies, creates enormous arbitrage opportunities and risks. Many Taiwanese cryptocurrency users seek overseas investment opportunities to balance their asset allocation. If derivatives can be traded legally, safely, and with low risk in Taiwan, it will be a significant benefit for Taiwan's trading environment.
Information disparity is also a significant issue. Since Taiwan only allows a spot market, many large international brands interested in derivatives choose ill-suited exchanges for trading due to unfamiliarity with international brands, resulting in substantial financial losses.
Therefore, Taiwanese operators and regulatory authorities urgently need to cooperate and discuss the rules for opening derivatives in Taiwan to provide a safe and regulated trading environment.
National Digital Sovereignty and Stablecoin Development
The development of stablecoins is not only a financial innovation but is also closely related to the sovereignty of national digital currencies. Hayek Technology co-founder and Business Director Wen Hongjun emphasized that if Taiwan does not have its own digital sovereign currency (such as a digital New Taiwan Dollar or a Taiwan stablecoin), it may yield financial sovereignty to other countries.
Taking South Korea as an example, stablecoins have already attracted the attention of the eight largest banks in the region, highlighting the critical role of stablecoins in the redistribution of digital financial sovereignty.
Wen Hongjun also pointed out that the function of stablecoins should not be limited to payments but should also serve as a medium of exchange and unit of account. Although the central bank has planned the scope of a digital New Taiwan Dollar and encouraged banks to issue deposit tokens, electronic payment providers are upgrading electronic money to stablecoins. However, the current amount of electronic money in Taiwan is only NT$20 billion, far lower than the NT$58 trillion in bank deposits. This also highlights the competition between stablecoins and banks in payment sovereignty. If payment providers can directly conduct transactions through stablecoins and blockchain networks in the future, they may bypass traditional bank card systems, changing the current payment landscape.
The special law is currently under review by the Executive Yuan. Experts urge that although the special law currently focuses mainly on compliance aspects such as anti-money laundering, regulatory authorities should expedite their regulatory capabilities to keep pace with market innovations.
Chen Jinji, Director of the Graduate Institute of Financial Management at Citibank, believes that a key point of cooperation is to allow traditional financial institutions to work together with virtual asset service providers, such as issuing a Bitcoin ETF priced in local fiat currency. This not only provides investors with more diverse options, avoiding asset losses due to exchange rate fluctuations, but also stimulates the business of local exchanges, brokerages, and investment trusts, creating a win-win situation.
Chen Jinji also reminded that regulatory agencies, facing limited human resources, encounter the dilemma of encouraging innovation while maintaining financial stability. He believes that through systems such as regulatory sandboxes, new financial innovations should be allowed to operate in controlled environments while gradually improving related regulations.
How is cryptocurrency taxation calculated?
During the seminar on 'Accounting Recognition and Transaction Guidelines for Virtual Assets', participants unanimously agreed that whether virtual assets can be formally included in corporate financial reports depends not on technology, but on whether the system accepts them. As international companies begin to list Bitcoin on their balance sheets, accounting and auditing are no longer just financial processes, but substantial guarantees of risk management and market trust. Especially in a context where systems generally lag behind innovation, companies that choose to lead will inevitably face discrepancies and pressures between practice and regulations.
Taiwanese cryptocurrency exchange HOYA BIT stated that as virtual assets gradually enter the mainstream financial system, platforms involved in fiat currency inflows and outflows and multi-currency management must confront the institutional gap between traditional tax systems and on-chain financial behaviors.
HOYA BIT stated that the most challenging aspect is the tax cost calculation for cryptocurrencies. Many on-chain asset conversions do not involve fiat currency, such as the exchange between stablecoins and mainstream cryptocurrencies. Whether the gains and losses generated during the exchange are realized or unrealized can easily lead to discrepancies in practice. If there is a lack of reasonable methods to calculate costs and distinguish between realized and unrealized gains and losses, it will directly impact the accuracy of tax declarations by cryptocurrency operators.
In addition, on-chain asset verification has become a core part of the auditing process for cryptocurrency exchanges. Accountants must clarify the ownership of wallet addresses and the nature of transactions, cross-verifying on-chain records with accounting records. In recent years, auditors' familiarity with blockchain tools has significantly increased. To meet auditing requirements, platforms are becoming more rigorous in data standardization, information integrity, and traceability. This is a key process for the virtual asset industry to transition from being 'technology-driven' to 'system-supported', and in the future, it will be a system gap that needs to be addressed in tax audits and financial report preparation.
Taiwan's virtual asset industry is at a crossroads, with the opening of derivatives and the development of a local stablecoin being essential for its internationalization. Striking a balance between innovation and regulation, and co-designing a sound system to provide more development space for the industry, will be key to whether Taiwan's virtual asset market can truly rise.
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