Telecommunications giant Taiwan Mobile is in talks with local crypto platforms about potential partnerships and even investment in one of the businesses.
The government-licensed wireless service provider is exploring opportunities for collaboration with blockchain-enabled financial institutions, including Taiwan-based XREX, Bloomberg reported, citing people familiar with the matter.
No decisions have been made, and a deal may not materialize, the report noted.
In a comment, Taiwan Mobile reportedly said it’s “open to any potential opportunities” without giving further details.
Wayne Huang, the co-founder of XREX, also declined to reveal whether the company is in talks with the telecom company.
However, Huang said he believes that larger institutions will eventually enter the web3 (decentralized internet built around blockchains) sector as it matures and regulatory clarity emerges.
“Synergies are high because such institutions own a sizable, already-KYCed user base, while XREX offers domain expertise in blockchain and cybersecurity,” he added.
XREX is a blockchain-enabled financial institution that offers crypto-fiat exchange services to help cross-border small and midsize enterprises.
Taiwan Mobile may also be exploring the possibility of entering the fintech business, similar to the Japanese telcos, according to Marvin Lo, a senior industry analyst at Bloomberg Intelligence.
The digital-asset industry is attempting to recover from a $1.5 trillion market rout last year, which led to several high-profile bankruptcies and thousands of job losses.
The US has since cracked down on crypto, while other jurisdictions like Hong Kong and Dubai seek to create regulatory frameworks that protect customers while attracting digital-asset investment.
Taiwan Appoints Financial Supervisory Commission to Regulate Crypto
Taiwan has recently appointed the Financial Supervisory Commission as the chief regulator for virtual-asset service providers as the country aims to introduce detailed guidelines by the end of September.
Taiwan has two financial regulators: the Central Bank of the Republic of China (Taiwan’s official name) and the FSC.
The Central Bank regulates monetary policy and foreign exchange regulations while the FSC has a broad remit over everything from banking regulation, securities, and futures, to anti-money laundering.
Meanwhile, the FSC won’t be regulating non-fungible tokens (NFT). Local Taiwan media quote the FSC’s Huang as saying that as NFTs are still emerging as an asset class, it’s too early to regulate them.
The move to regulate digital assets comes as Taiwan has historically taken a hands-off approach to crypto regulation, only regulating the asset class under the framework of controlling money laundering.
In September last year, authorities approved 24 crypto platforms under the island’s anti-money laundering compliance system.
However, the country ramped up efforts to regulate the sector after it was revealed that the Taiwanese were among those most impacted by the collapse of FTX.