2025 Virtual Assets Future - Derivatives Supervision Policy Forum
As the Taiwanese government actively promotes the virtual asset service law, the draft law will be submitted for review this year, and Taiwan's virtual asset industry is entering a new stage of development. The industry has high expectations for the introduction of cryptocurrency derivatives such as futures and options, but there are still many questions about how the new regulations will regulate these products. The Bitcoin and Virtual Asset Development Association held the "2025 Virtual Asset Future - Derivatives Regulatory Policy Forum" today (8).
The forum brought together representatives from the virtual asset industry, industry associations, academia, and government departments to jointly review and discuss the relevant provisions of the draft special law on derivative products. The forum conducted in-depth discussions from the business and legal practice levels to seek the best strategy for the development of Taiwan's virtual asset derivative product industry.
In the forum discussion session "Virtual Asset Derivatives: Taiwan's Legal Blueprint and Development Opportunities", Xu Peiling, chairman of the Bitcoin and Virtual Asset Development Association, served as the moderator and invited many industry and academic leaders to have in-depth discussions, including Wen Hongjun, co-founder and business chief of Hayek Technology, Liu Shiwei, founder and CEO of MaiCoin Group, Zheng Guangtai, founder and CEO of BitoPro, and Chen Jinji, professor and director of the Institute of Financial Management at CITIC Financial Management Institute.
Strengthening Taiwan's competitiveness and moving toward becoming one of the world's top ten
According to a report by Market Research Intellect, a market research firm, the cryptocurrency derivatives trading market has 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%. From the report, it can be seen that with the increasingly clear policies of various countries and the increased participation of professional institutions, the derivatives market is growing steadily and is expected to become an important driving force for the mainstreaming of the virtual currency industry.
At the forum, experts agreed that Taiwan ranks among the top 20 in the world in terms of economic size, but only ranks among the top 40 in terms of derivative commodity trading volume in the capital market. MaiCoin Group CEO Liu Shiwei pointed out that if the same vision can be projected into the field of virtual assets, especially cryptocurrencies and their derivative stablecoins and RWA (real asset tokenization) products, Taiwan has the potential to rank among the top ten in the global cryptocurrency market in the next five to ten years.
This requires not only that the government expand the regulation of derivative products on the basis of fiat currency to cryptocurrency exchange, but also that the market rule that the trading volume of derivative products is usually 3 to 5 times that of spot trading volume needs to be recognized. By developing diversified derivative products, Taiwan will be able to significantly increase the industry's vitality, attract outstanding talents, and expand the profit space that the industry deserves.
Liu Shiwei believes that with increasingly stringent regulations and changes in the overall environment, compliance and operating costs continue to rise. Under increasing cost pressure, local compliance companies urgently need to develop derivatives business as a new operating driver to achieve sustainable operations. If the domestic trading environment is limited to the spot market, funds with investment needs for derivatives will be diverted to overseas platforms, which will not only accelerate capital outflows, but also increase the government's challenges in tracking financial flows and preventing money laundering.
Current Situation and Challenges: Dilemmas Facing Taiwan's Business Operators
Despite the strong market demand, Taiwan's crypto asset industry faces many challenges. BitTor CEO Zheng Guangtai mentioned that when the platform was first established, derivatives trading was already popular in the Chinese mainland market, while in Taiwan, spot trading was mostly preferred in the early days. However, today, 70% to 80% of customers choose to trade with leverage after entering the exchange, indicating that the demand for derivatives continues to rise.
One of the main reasons for this phenomenon is that Taiwan's current regulatory environment has strict restrictions on deposits and withdrawals, resulting in a continuous outflow of funds. In addition, CEO Zheng Guangtai also pointed out that most Taiwanese operators have low handling fees and high personnel and risk control costs, which also makes many operators face bottlenecks in local development.
More importantly, the high volatility of the spot market, coupled with the unique high volatility of cryptocurrencies, creates huge arbitrage opportunities and risks in the market. Many Taiwanese cryptocurrency users also 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 great benefit to Taiwan's trading environment.
Information gap is also a major problem. Since Taiwan only opens the spot market, many large foreign brands interested in derivatives choose to trade in exchanges that are not worthy of their name because they are not familiar with international brands, resulting in huge financial losses.
Therefore, Taiwanese businesses and regulatory authorities urgently need to work together to discuss the rules for opening up Taiwan’s derivatives products in order to provide a safe and regulated trading environment.
National digital sovereignty and stable currency development
The development of stablecoins is not only a financial innovation, but also closely related to the country's digital currency sovereignty. Wen Hongjun, co-founder and business chief of Hayek Technology, emphasized that if Taiwan does not have its own digital sovereign currency (such as a digital New Taiwan dollar or a stable Taiwan dollar), it may cede financial sovereignty to other countries.
He took South Korea as an example. Currently, South Korea's stablecoin has attracted the attention of the eight major local banks, showing the key role of stablecoin in the redistribution of digital financial sovereignty.
Wen Hongjun also pointed out that the function of stablecoins should not be limited to payment, but should also be used as a medium of exchange and unit of account. Although the central bank has planned the scope of digital New Taiwan dollars and encouraged banks to issue deposit tokens and electronic payment companies to issue electronic currencies to upgrade to stablecoins. However, the current stock of electronic currencies in Taiwan is only 20 billion Taiwan dollars, far lower than the 58 trillion Taiwan dollars in bank deposits. This also highlights the competition between stablecoins and banks in payment sovereignty. In the future, if payment companies can directly conduct transactions through stablecoins and blockchain networks, they will have the opportunity to skip the traditional bank's card swiping system and change the existing payment pattern.
The special law is currently under review by the Executive Yuan. Experts have called for the competent authorities to accelerate the improvement of their regulatory capabilities in order to keep up with the pace of market innovation, although the special law currently focuses on compliance aspects such as money laundering prevention.
Chen Jinji, director of the Inter-bank Financial Management Research Institute of CITIC Institute of Financial Management, believes that a key point of cooperation is to allow traditional financial institutions to work together with virtual asset service providers.
This will not only provide investors with more diverse choices and avoid asset losses caused by exchange rate fluctuations, but also activate the business of local exchanges, securities firms and investment trusts, creating a win-win situation.
However, with limited human resources, regulators are faced with the dilemma of encouraging innovation and maintaining financial stability. They should allow new financial innovations to operate in a controlled environment through systems such as the financial sandbox and gradually improve relevant regulations.
How to calculate cryptocurrency tax?
In the forum on "Guidelines for Accounting Recognition and Trading of Virtual Assets", participants agreed that the key to whether virtual assets can be formally included in corporate financial statements is not technology, but whether the system accepts it. When international companies gradually include Bitcoin in their asset tables, accounting and auditing are no longer just financial processes, but a substantive guarantee for risk control and market trust. Especially in the context of the system generally lagging behind innovation, companies that choose to stay ahead are bound to face the gap and pressure between practice and regulations.
Taiwan's cryptocurrency exchange HOYA BIT said that as virtual assets gradually enter the mainstream financial system, if the platform involves legal currency inflows and outflows and multi-currency management, it will have to face the institutional gap between the traditional tax system and on-chain capital behavior.
HOYA BIT said that the most challenging part is the tax cost calculation of cryptocurrencies. Many on-chain asset conversions do not involve legal tender. For example, the exchange between stablecoins and mainstream crypto assets, whether the gains and losses generated during the exchange are realized gains and losses, is prone to disagreement in practice. If there is no reasonable way to calculate the cost and distinguish between realized and unrealized gains and losses, it will directly affect the accuracy of the tax declaration of crypto operators.
In addition, on-chain asset verification has become a core part of the audit process of crypto exchanges. Accountants must clarify the ownership of wallet addresses and the nature of transactions, and cross-verify on-chain records with accounts. In recent years, auditors have become more familiar with blockchain tools. In order to meet audit requirements, platforms have become more rigorous in data standardization, information integrity and traceability. This is the key process for the virtual asset industry to move from "technology-driven" to "system-based", and it will also be a system gap that needs to be filled in tax audits and financial report preparation in the future.
Taiwan's virtual asset industry is at a crossroads. Opening up derivative products and developing local stablecoins are the only way for it to go global. How to strike a balance between innovation and regulation and jointly design a sound system to give the industry more room for development will be the key to whether Taiwan's virtual asset market can truly rise.
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