Fri, Dec 29, 2017 - Page 8 News List

A chance to lead innovation in Asia

By James Cooper and Michael Sung

Other countries are still trying to figure out their policy.

For example, South Korea has a booming cryptocurrency market with an average daily trade volume of US$1.4 billion. Nonetheless, South Korean Financial Supervisory Service (FSS) Governor Choe Heung-sik announced that the FSS does not consider cryptocurrency a legitimate currency and thus has no plans to regulate or supervise it.

A month later, bitcoin futures and derivatives were banned as were initial coin offerings.

However, as global bitcoin speculation continues unabated, it is likely that South Korea’s regulators will impose a total ban on cryptocurrency exchanges, emulating the PRC’s policy.

This leaves Taiwan with some space in which to operate and take a leadership position on cryptocurrencies and other uses of blockchain for fintech and beyond. This exciting new arena works well with the nation’s future economic plans.

President Tsai Ing-wen (蔡英文) promulgated her “five plus two” strategy, understanding that there are only so many touchscreens and semiconductor chips for iPhones that Taiwan can manufacture. With innovative legislation that provides for blockchain regulations, the nation is ready to be the prime mover for digital technologies and new governance mechanisms.

There is no doubt that cryptocurrencies and blockchain technologies will continue to disrupt the world order. Wise governments will understand that the answer is to latch onto this innovation, shepherding it with enlightened legislation.

The alternative is to stand on the sidelines and allow countries like Singapore and Japan to take world leadership of technologies that will drive the future growth and innovation of society.

Taiwan has a very unique chance to be the most progressive government in Asia.

The hearing that Jason Hsu (許毓仁), the innovation-friendly Chinese Nationalist Party (KMT) legislator, will be leading in the Legislative Yuan today is important as Taiwan looks to new avenues for its economic future.

Hsu sees blockchain as more than a platform to create digital currencies: It is an opportunity to harness data to increase efficiency, while ensuring privacy and security are protected. It is also a mechanism by which to provide transparency in governance.

A financial technology experimentation act would provide both entrepreneurs and traditional financial institutions the ability to participate in this exciting new world through innovative reregulation.

This enlightened form of governance is the future and one that will require bold thinking, new forms of enforcement and alternative public-private partnerships.

You can watch the live Legislative Yuan proceedings on Facebook, another example of how technology can promote better governance and civic engagement.

James Cooper is professor of law at California Western School of Law in San Diego. He has advised governments around the Americas on technology transfer and the rule of law. Michael Sung is an internationally recognized technology pioneer, adviser to governments around Asia on innovation policy and the principal of CarbonBlue Innovations, a cross-border tech transfer platform and fund headquartered in Hong Kong.

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