Taiwan to Establish STO as a Fundraising Model

Wilfred Michael 

Wilfred Michael

News reporter

04 March 2019,
15:58
Taiwan to Establish STO as a Fundraising Model

The Taiwan Financial Supervisory Commission (FSC) has lauded the potential of security token offerings STOs) to serve as a useful fundraising model for new companies.

For this reason, the regulators plan to officially adopt it as part of existing fundraising channels approved for Taiwanese companies.

According to Taiwan Economic Daily, the agency has already mapped out a timeline for the adoption of STOs which they believe offers more investor protection that Initial Coin Offerings (ICOs).

First, there would be a gathering of industry experts to discuss the innovative fundraising model in April while the process for the formulation of rules to guide STOs will be completed in the penultimate month of the year.

Moving further, FSC Chairman Gu Lixiong shed more light on why the regulators are ready to adopt the STO fundraising mechanism.

According to him, young people are less inclined to invest in stocks and would prefer a more innovative model than what the older generation was accustomed to.

Additionally, Lixiong is quoted in the report as saying,

“An STO is an emerging product of the next generation of capital markets, which may affect the popularity of Taiwan's new creative teams in the international market in the next five to ten years.”

So, it is apparent that the regulators want to position Taiwan for the future by creating the regulations now.

To promote faster adoption for STOs, the top official also mentioned that the regulators would approve the listing of the offerings on platforms other than the national stock exchange.

He also hinted the possibility of allowing the exchange of these security tokens on over-the-counter (OTC) desk but failed short of mentioning whether the government or private institutions would manage such desks.

If authorities in Thailand were to succeed in adopting STOs, then it would mirror the effort in the Philippines were regulators recently released a regulatory framework for STOs.

 

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