TAIWAN Trends and Developments Contributed by: Robin Chang, Ken-Ying Tseng and Eddie Hsiung, Lee and Li, Attorneys-at-Law
tion services. A proprietary trading platform facili- tated transactions between investors and dealers, while integration with the FISC cash flow platform enabled DVP via USD deposit tokens. • Funds – this group tokenised TWD money mar- ket funds and Taiwan equity funds via the TDCC blockchain. It offered subscription, redemption, and trading services, connecting to the FISC cash flow platform to achieve DVP through TWD deposit tokens. By employing blockchain and smart contracts in both primary and secondary markets, these three groups demonstrated several key benefits: reduced settle- ment times, near 24/7 trading, automated corpo- rate actions (interest/redemption), lower investment thresholds, and enhanced operational, regulatory, and capital efficiency. Challenges During the tests, participants gathered international case studies and identified several issues that neces- sitate a steady, cautious approach to future imple- mentation. • Efficiency – while global RWA platforms exist, their trading volumes remain low compared to traditional capital markets. Given the high efficiency of exist- ing traditional settlement systems, it remains to be seen if these small-scale POCs can maintain high benefits when scaled up. • Regulations – observations of other countries show no global consensus on legal frameworks. Approaches range from drafting special laws to amending existing ones or providing new interpre- tations of current regulations. Taiwan must tailor its approach to local needs while remaining flexible enough to align with international standards. • Market Roles – traditional markets have spent cen- turies developing intermediaries (brokers) and infra- structure (exchanges/depositories). Moving toward decentralised or disintermediated smart contract mechanisms is a massive shift. The transition of traditional institutions, changes in investor behav- iour, and the maintenance of market confidence all require further testing.
Future focus The FSC will focus on three key pillars: Regulatory Adaptation, Platform Development, and International Connectivity. • Regulatory Adaptation – the FSC has commis- sioned the TDCC and the Taipei Exchange (TPEx) to conduct outsourced research on legal adjust- ments for security tokenisation. Additionally, a “Digital Assets” committee has been formed under the Financial Action Innovation Regulatory Adjust- ment Platform to study RWA tokenisation and stablecoins. • Platform Development – inspired by international models, the FSC plans to co-ordinate with periph- eral units and financial institutions to establish a joint RWA trading platform. A dedicated “RWA Token Platform Project Group” has already met several times to draft the operational and supervi- sory framework. • International Connectivity – the FSC continues to encourage Task Force members to share global trends through existing channels. Once the regula- tory and platform frameworks are clear, the FSC will promote co-operation with international institu- tions to ensure Taiwan’s RWA ecosystem is glob- ally integrated. CBDC and blockchain Similar to other countries, Taiwan’s central bank pre- viously conducted experiments related to CBDCs. According to the central bank’s recent reports, the focus for future digital monetary transformation will be on the development of wholesale CBDCs and deposit tokens. According to earlier public reports from the central bank, the Bank for International Settlements (BIS) and major countries are actively studying the tokenisation of wholesale central bank money and bank deposits. Taiwan’s central bank is also conducting related proof- of-concept projects and plans to collaborate with par- ticipating banks to build a shared tokenisation plat- form to test, among others, the following scenarios. • Interbank Transfers Using Deposit Tokens – banks can utilise the shared tokenisation platform to convert customer deposits into deposit tokens
650 CHAMBERS.COM
Powered by FlippingBook