TAIWAN Trends and Developments Contributed by: Robin Chang, Ken-Ying Tseng and Eddie Hsiung, Lee and Li, Attorneys-at-Law
Lee and Li, Attorneys-at-Law 8F, No 555, Sec. 4 Zhongxiao E. Rd
Taipei 110055 Taiwan, R.O.C.
Tel: +886 2 2763 8000 Fax: +886 2 2766 5566 Email: attorneys@leeandli.com Web: www.leeandli.com/EN
Blockchain Technology in Digital Assets in Taiwan: Tokenisation “Non-token-related” projects In Taiwan, blockchain applications have often been divided into two main categories: “non-token” and “token” projects. As for the non-token side, accord- ing to the relevant new reports, the following are the examples of application of blockchain technology. • Ministry of Justice’s attorney certificates – the sys- tem allows for verification of a lawyer’s certificate and registration status, ensuring that the appointed individual holds valid practising qualifications. With blockchain technology, the system ensures data transparency and makes tampering more difficult. • Insurance Claims Process with blockchain tech- nology – through this service, policyholders can authorise which types of medical information may be accessed by insurance companies. The authorised data may then be transmitted directly to the insurer, shortening the claims process and improving efficiency. Moreover, all data transfers are recorded on the platform, ensuring a traceable usage history. • Digital Copyrights – creators can store their works on the blockchain, where smart contracts are used to directly record the rights shares of lyricists and composers, as well as to automatically allocate profits. Notwithstanding the above, general market observa- tion shows that if a project does not involve any token issuing or offering, the level of market attention tends to be much lower. Moreover, project discussions usu- ally become more active when the virtual-asset mar-
ket prices are approaching a bull market. Therefore, at least in Taiwan, purely blockchain-based projects without token elements still find it rather difficult to decouple from the overall token market trends. The ease of fundraising for these start-ups is also heavily influenced by virtual-asset market prices. NFTs Between 2020 and 2022, applications of blockchain technology – particularly non-fungible tokens (NFTs), which were commonly used to represent digital art, music, collectibles, trading cards, and photo albums – gained significant attention in Taiwan, especially fol- lowing the Beeple phenomenon. During this period, several local NFT platforms also emerged. At the time, public and industry discussions largely centered on what exactly NFT holders “own” or “acquire” when purchasing an NFT. From a legal standpoint, the classification of NFTs should be assessed on a case-by-case basis, primar- ily based on the rights and obligations set out in the relevant terms and conditions. While some industry participants argued that NFTs should be treated dif- ferently from fungible tokens due to underlying tech- nological distinctions, the government has not issued any formal regulatory stance on NFTs. This has led to considerable market uncertainty. Our observation is that, as Taiwan’s regulatory envi- ronment for virtual assets becomes increasingly strin- gent – and amid a rise in illegal fundraising, fraud, and money laundering cases – NFT-related business operators have found themselves under heightened scrutiny. As the global NFT boom has cooled, local
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