TAIWAN Law and Practice Contributed by: Robin Chang, Sarah Wu and Eddie Hsiung, Lee & Li
From a regulatory perspective, certain insur - ance laws and regulations are applicable to both “non-life insurance” and “insurance of the person” enterprises. However, distinct princi - ples and specific regulations may be applicable based on the nature of each insurance product involved, etc. 9. Regtech 9.1 Regulation of Regtech Providers There are no specific laws or regulations gov - erning regtech providers (assuming they are not financial services entities). However, if any regulated financial services entity wishes to out - source its operation to a regtech provider, out - sourcing regulations governing financial services entities may apply. Please see 2.8 Outsourcing of Regulated Functions for outsourcing. 9.2 Contractual Terms to Assure Performance and Accuracy Please see 2.8 Outsourcing of Regulated Func- tions and 9.1 Regulation of Regtech Providers . 10. Blockchain 10.1 Use of Blockchain in the Financial Services Industry The rise of blockchain technology has led to financial institutions actively researching how to incorporate it into their products and ser - vices. Some have even established dedicated research and development departments for this purpose. However, since the financial industry is heavily regulated, the implementation of block - chain in this sector would need to overcome cer - tain existing legal restrictions. Examples of the solutions to deal with such restrictions include applying to enter a regulatory sandbox, with two
approved applications related to blockchain: (a) using blockchain for fund transfer information between financial institutions; and (b) provid - ing “fund exchange” service using blockchain technology. With the emergence of new busi - ness models and regulatory amendments, it is expected that the financial services industry will have even more applications of this technology in the future. 10.2 Local Regulators’ Approach to Blockchain Apart from the regulations relating to crypto - currencies mentioned in this article, the Taiwan government has not introduced any new regu - lations following the emergence of blockchain. However, two policy trends have been reported in local news: (a) The Central Bank has established a special task force to study Central Bank Digital Currency (CBDC), which is commonly referred to as the digital New Taiwan Dollar. The task force has completed two exploratory projects on the pos - sibility of issuing “wholesale CBDC” for finan - cial institutions and “retail CBDC” for the gen - eral public. Regarding “wholesale CBDC” , the Central Bank has observed that a platform built with distributed ledger technology (DLT) does not necessarily outperform a platform with a centralised system. (b) In March 2024, the then Chairperson of the FSC, Mr Huang, stated to the Legislative Yuan that the FSC is examining the feasibility of tokenising real-world assets (RWAs), with the most likely application being the tokenisa - tion of fund interests. Further, in late 2024, the FSC established an RWA tokenisation task force in co-operation with the Taiwan Depository & Clearing Corporation and six financial insti - tutions. The task force’s goal is to assess the
855 CHAMBERS.COM
Powered by FlippingBook