Even though the market shows signs of a slight recovery, a senior Taiwanese official just made an important announcement today, uring the government to start working on new policies which could tackle the potential impact of digital currencies on the country’s financial stability.
During a seminar hosted on February 2, at the Taiwan Academy of Banking an Finance, Shin Jun-ji, vice president of Taiwan’s executive branch of government, covered the several issues created by the financial impact of cryptocurrencies, but also relevant regulatory responses.
Taiwan is not yet prepared to completely deal with the current situation
According to an official government reported, quoted by CoinDesk, Mr. Shih revealed that despite the fast development of cryptocurrencies over the past years, Taiwan should be engaged proactively in discovering new policies to tackle the technology’s constantly growing influence on finance.
Besides this, he also mentioned that the country should have a good position in maintaining its financial stability, in the eventuality of a market collapse. The latter, say analysts and investors, could be imminent, considering how the prices evolved over the past few days.
The official continued his discourse, explaining how Bitcoin’s total market cap from just a few weeks ago, when it was trading at around $10,000, was equaling one third of Taiwan’s foreign exchange reserve, as well as twice of the government’s financial budget or about the total assets of all banks in the country.
The sum he was talking about was $170 billion at that time, but now, considering the continuous downfall of Bitcoin, alongside most coins, it reached a bit over $128 billion.
Is the bubble still out there?
Bitcoin’s recent surge made more and more people believe that it’s a bubble which – or is about to – completely burst – Mr. Shish said. However, the price surge itself doesn’t necessarily mean that is the case.
By the end of his intervention, he concluded that the Taiwanese government should immediately start looking for measures to ensure that they are able to deal with the impact a severe price drop can have. But will this actually happen or the market will start recovering soon? Only time can tell.