Are encryption financial products involved in fund raising? Legislators believe it is unfair to third-party payments. FSC: Discussing regulation of Decentralized Finance and financial products next year.

During the legislative hearing on December 19th, KMT legislator Lai Shih-bao raised multiple questions to Financial Supervisory Commission Chairman Peng Chun-lung regarding the phenomenon of the US interest rate cut causing a big dump in the stock market. The discussion covered global stock market trends, the attractiveness of the encryption currency market to capital, and Taiwan's regulatory policies on CeFi (DeFi) and virtual assets.

Legislator Lai Shih-pao questioned the phenomenon of cryptocurrency industry receiving USDT and providing interest rate products, using the term 'suspected fund-raising'. Chairman Peng Chin-lung responded that it will be included in the discussion of special legislation next year as a type of financial product similar to debt, and regulations for DeFi will be developed, sparking discussions.

Interest rate cuts fail to boost the stock market, leaving legislators puzzled

Lai Shibao pointed out that according to general economic logic, the US interest rate cut should be positive news for the stock market, but it caused the big dump to exceed 1,000 points. He hoped that Peng Jinlong would analyze the main reasons with professionalism. Peng said that the market's expectations of the pace of interest rate cuts, coupled with uncertain international political factors, the effect of investor vacations at the end of the year, and the impact of US inflation and tariff policies, could lead to sharp volatility in the stock market. He further mentioned that the low expectation of future interest rates in the "dot plot" is also one of the reasons for the lukewarm market reaction.

Capital flow to encryption currency?

During the questioning, Lai Shibao mentioned that some people believe that funds are flowing from the traditional market to the cryptocurrency market, which may be one of the reasons for the reduction of stock market funds. He mentioned that the recent surge in the price of Bitcoin has attracted the attention of the capital market. Peng Jinlong responded that although the trading volume of cryptocurrencies is still relatively low compared to the traditional financial market, the growth rate is amazing, and Taiwan has also observed the increasing attractiveness of virtual assets.

DeFi product challenges regulation: Are they suspected of raising funds?

Lai Shih-bao specifically pointed out that the exchange BitTrust provides a short-term fixed interest rate of up to 4.5% to 5.5% based on stablecoins such as USDT, claiming to be 'guaranteed and stable profit'. He believes that such products are similar to past fund-raising incidents and questions whether the Financial Supervisory Commission bears regulatory responsibility for this.

Peng Jinlong responded, "This is the so-called part of DeFi." DeFi-related transactions are currently within the regulatory scope of the FSC, but specific regulations are still being formulated. He revealed that the FSC will hold a public hearing on the special law for virtual asset management in January 2025 and submit it to the Executive Yuan for review in June.

The currency circle promotes financial products, which is unfair to compliant third-party payment operators

Lai Shih-pao said, "We need to establish some rules. Third-party payment, for example, on a certain platform, I put ten thousand dollars there, I spent two thousand to buy something, and there were eight thousand left. He took the eight thousand for investment and gave me a fixed interest rate of 4%. Is this okay? You say it's not okay for third-party payment in the past, but you can do it with this currency exchange. This is very strange."

Peng Jinlong responded, "I didn't say it was possible." He said this is something evolving worldwide and will be discussed in future regulations.

Virtual Asset Special Act: Clarify and regulate market behaviors

Regarding the future direction of cryptocurrency regulation, Peng Jinlong stated that the Virtual Assets Act will cover various aspects such as transaction regulations, institutional management, consumer protection, etc., and is committed to ensuring the rights and interests of investors. He emphasized that legal trading activities must comply with regulations, and the goal of the act is to allow emerging financial technologies to develop on a legal and compliant basis.

Lai Shibo emphasized at the end that the public has high expectations of the FSC and believes that the FSC should be responsible for all areas involving financial transactions. Peng Jinlong responded that not all financial transactions are under the jurisdiction of the FSC, but cooperation with other departments will be strengthened to ensure the stable operation of the market.

Is this article involved in the fundraising of encryption currency financial products? Legislator believes it is unfair to third-party payments, FSC: Discussing inclusion of DeFi and financial products next year at the earliest, first appeared in ChainNews ABMedia.