Crypto Congressman is the new nickname Vitalik Buterin, co-founder of Etherium has given me, who among other experts I have been working to make Taiwan a Blockchain island.
On December 29 2017, Taiwan’s legislature passed Financial Technology Experimentation and Innovation Act, which is widely known as Regulatory Sandbox Bill. Legislators from different parties came together to make history by passing a significant regulatory overhaul that will usher in a new era for Taiwan’s financial technology. Coming from technology sector and having been a tech entrepreneur myself, I am a big champion for this bill. Over the months I have held public hearings, worked with focus groups, academia, industry experts and regulators to make sure all suggestions considered.Not only did I participate in the legislative process but also personally drafted a version of the bill. The final version that got passed at the end is one with which all legisaltors’ drafts are inlcuded.
Taiwan has trailed behind several countries in the region such as Singapore Hong Kong and South Korea, and this act is a good start to help remedy Taiwan’s fintech gap. This act is the culmination of years of effort to turn Taiwan into a fintech hub. I am honored to have had a leadership role in drafting the act.
There are several features in this bill that makes Taiwan’s Fintech legisaltion unique to the world.
- The world’s longest testing period: the new legislation allows 3 years maximum testing period — one year basic duration with 4 extensions for 6 months each.
- Banks and startups can file joint applications to be considered for entry into sandbox. This can lower frictions that might have caused otherwise during implementations. Banks will be encouraged to incporpoate fintech products and services into their operations.
Let me know if you would like to apply for Sandbox and my office will be happy to help you. I am committed to making Taiwan a more open and supportive environment of innovation and Fintech.
With this bill, Taiwan paves the way for Fintech industry to prosper. FSC is set to launch a national Fintech Accelerator and kick off a Fintech fund. This has been a long-awaited day since industries and startups are rallying to push this forward. On the day that the bill was passed, I held a public hearing on blockchain and cryptocurrency where a room full of enthusiastic entrepreneurs shared their feedback on how to make Taiwan a competitive environment for fintech.
Below are some of the points mentioned:
For blockchain and cryptocurrency,the government will need to understand not only the technical aspects but also the economic implications. Decisions about government involvement will require a good understanding of how blockchain technology works and how it affects the economy. For example, the evolution of bitcoin from a store of value (currently quite speculative) into a proper medium of exchange (i.e. an actual currency, albeit international) over time will have impact on taxation considerations. Furthermore, it is important for governments to fully understand exactly where the blockchain technology is or is not fit for purpose. E.g. does it make sense for a government controlled cryptocurrency??
For implementation, the blockchain is an indelible, permanent, open ledger that is eminently suited to auditing and tracking currency movement. However there are techniques that can be used to obscure the (electronic) ‘paper trail’ (e.g. ‘coin join’). Some fairly sophisticated algorithms will be needed to track movements of funds within the blockchain and also at the entry/exit interfaces.
The government needs to provide guidance on programs to enhance business development so that commerce can thrive while at the same time government can provide a regulatory framework for AML/KYC/Taxation/etc. that enhances rather than encumbers commercial activity.
Here are some blockchain uses that I believe government can potentially explore:
- Decentralized prediction platform for share market, politics, etc.
- Decentralized patient record management
- Proof of ownership for digital content
- Digitalizing assets: improves anti-counterfeit measures
- Provide digital identitify that protects consumer privacy
- Enable authenticity of a review
- Decentralized Internet and computing resources to every home and business
- Digitalizing company incoporations, tranfer of equality/ownership and governance
- Digital security trading:ownership and transfer
- Digitalization of documents/contracts and proof of ownership for transfer
- Decentralized storage using a network of computers on blockchain
- Decentralized IoT
- Provide digital identity that provides consumer privacy
- Escrow / Custodian services
- Smart contract IT portal executing order fulfillment in e-commerce and manufacturing
- Proof of ownership and marketplace for sales and purchases of digital assets
Blockchain is a deep tech which isn’t perfect today. The only way to move forward is to try. The three year sandbox provides the right environment for experimentation at all levels in Taiwan‘s economy.
Below are some of the potential experiments I would like to encourage Taiwan government to work on:
Political Donations: Imagine all politicians using blockchain to keep track of their political donations. This will make it transparent and money flow traceable. The biggest asset in politics is "trust". On blockchain you have full-proof trust. If a politician has nothing to hide, blockchain is the best way to keep track of expense and donations. I would personally champion this by becoming the first politician to use blockchain for political donations.
Voting System: I believe a blockchain-enabled voting system will solve today's voting problems on many levels. It will drastically reduce logistics and organizing cost of the voting and counting ballots. It can also prevent voting fraud since all the records are kept on blockchain. This will also give way to just and fair accountabilities for all candidates.
Energy Management:It is difficult to accurately forecast and supply energy needs for major cities. Added levels of complications arise as the total amount of nuclear energy is to replaced by renewable energy.
Medical record on Blockchain: obviously, with digital health and telemedicine putting medical record on blockchain can have tremendous impact on curing chronicle diceases and preventive medicine.
If you like to help out with the above projects, feel free to let me know.
I will continue to encourage stakeholders such as Taiwan’s Financial Supervisory Commission, central and local government officials, legislators, and the public to embrace financial disruption and financial innovation”.
If you have any question, feel free to contact me directly.
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