podcast transcript

Podcast Transcript: Crypto Congressman Jason Hsu on His Ambitious Blockchain Goals for Taiwan and Thoughts on Crypto Regulations in US and Asia

In this episode, Joyce Yang from Global Coin Research is joined by Taiwan Congressman Jason HsuJason has been given the nickname “Crypto Congressman” by Vitalik Buterin.

Jason has worked as a tech entrepreneur before getting involved with politics. In 2016, he became an official legislator and member of parliament in Taiwan, focusing much of his attention on bridging the gap between public policy and technology. He has since introduced several initiatives around autonomous vehicles, cyber security legislation, digital economy laws, and is now focusing his attention on crypto and blockchain legislations.

In our conversation, we discuss several of Jason’s ambitious plans to make Taiwan blockchain- enabled. He also expresses his thoughts on the state of Crypto regulations in Taiwan, and shares his unique views on the cryptocurrency and blockchain space in the US and the rest of Asia.

You can check out more of his thoughts on the Forbes article here.

Time and Topics discussed in Our Interview

1:40- Introduction to Crypto Congressman Jason Hsu

2:35- History of technology innovation in Taiwan and state of crypto and blockchain there now

4:50- How is Taiwan different from the rest of Asia in terms of crypto regulations? And who do they look to for

7:19- How do the Taiwan locals treat crypto?

9:20- Would Wechat and Alipay take over blockchain payment in Asia?

10:25- Taiwan wants to push help blockchain to the rest of the world

10:55- How do you engage with blockchain companies in Taiwan and how should companies outside of Taiwan talk to you?

14:44- Taiwan seems more focused on the blockchain technology, what about the exchanges?

16:31- What has Vitalik been up to and what are his thoughts on Taiwan?

18:28- Recent legislation added by Jason and the team

21:33- What other projects do you talk to and is close to?

24:47- Who else in the regulatory body is assisting you in this blockchain endeavor?

25:30- Learn about Jason’s One Crypto World” (OCW) tokens and who the tokens have been given to


PODCAST TRANSCRIPT

Joyce Yang

Hi everyone, welcome to the Global Coin Podcast. A podcast where we hear from leading global operators and investors in crypto, with their thoughts on the Asia Blockchain and cryptocurrency space. Asia is really a cryptocurrency hub, and understanding the region is as important as understanding what’s going on locally. We also have a newsletter that highlights all the important crypto news coming out of Asia with many translated by our staff directly from the local media. Check it out at [globalcoinresearch.com].

I’m your host Joyce Yang, and I’m joined today by Taiwan congressman Jason Hsu.

Looking to advertise your crypto project or business, reach out to [hello@globalcoinresearch.com] for sponsorship opportunities.

Jason has been given the nickname “Crypto congressman” by the Tech leaders. He has worked as a tech entrepreneur before getting involved in politics. In 2016, Jason became an official legislator and a Member of Parliament in Taiwan, focusing much of this tension on bridging the gap between public policy and technology. He has since introduced several initiatives around on autonomous vehicles, cybersecurity legislation digital economy laws, and is now focusing his attention on crypto and blockchain legislation. In our conversation, we discussed the state of crypto regulations in Taiwan and how Jason sees cryptocurrency and Blockchain space to evolve in Asia.

Jason, would you please introduce yourself to our audience.

Jason Hsu

So my name is Jason Hsu, I am a member of parliament and a legislator from Taiwan, and I’m also known as the “Crypto congressman from Taiwan” and this is a nickname given by Vitalik Buterin; the creator of Ethereum. I got this nickname because I was the first one in Taiwan or many in the political sphere to work on creating progressive and friendly legal environments for crypto and Blockchain. Before becoming a politician, I was a tech entrepreneur. I was a startup guy who focused on a mobile Internet and I ran TEDxTaipei conferences from 2009 to 2016. My legislative portfolio includes Cybersecurity, immigration reform, artificial intelligence and autonomous driving vehicles and as well as same-sex marriage. And now I’m working on the Blockchain and cryptocurrency.

Joyce Yang

Many our listeners are probably not very familiar with Taiwan, especially around the crypto community there. Can you share what you’re seeing on the ground?

Jason Hsu

Taiwan has come a long history of technology excellence. We first created a semiconductor industry back in the 1980s and which really made Taiwan a part of global electronic supply chain, and today’s Taiwan is still very much high-tech island going from the IC chips to semiconductor to finished computer electronics products.

And how crypto come into play I think starts in early days when Bitcoin first came out, there’s a group of investors who bought Bitcoin in early days, in 2014. When Ethereum was launched, and I think Taiwan was one of the early adopters as well. One of the super node, and even today Ethereum Foundation employs a certain number of employees out of Taiwan, and also Taiwan’s semiconductor industry is influential part in crypto mining industry. TSMC’s IC chips, as you know, attributed to the significant amount of the crypto mining. And even today, we see a lot of the software integrations from Blockchain and adoption and the cryptocurrency.

But things really start picking up when on September 4th 2017, when China banned ICO, that’s when a lot of projects started to coming to Taiwan. A lot of exchanges knocking on the door of Taiwan to make a landing in Taiwan, so I started also paying attention to crypto during that time, I was already a big believer when the Bitcoin white paper was published, because I felt the idea of peer-to-peer electronic money transaction system is a pushback to the highly leveraged institutional finance that’s propelled the system back in the 2009 what Lehman Brothers fell apart. And this year is having to be the 10th anniversary of the financial meltdown and also the 10th anniversary of Satoshi’s whitepaper. So the two things really coincided with each other, but I started paying attention to crypto in 2017 when China banned ICO, and I openly asked our prime minister to take a “low-touch” approach to cryptocurrency and Blockchain, and that’s really when things started picking up.

Joyce Yang

So it sounds like you started focusing on Blockchain quite recently, but you guys have come very far and done a lot of things.

Jason Hsu

Yeah, so Taiwan really has what we call our “first mover advantage” and also it’s a smaller place compared to China or the US, and it’s also more receptive to outside influences, which is unlike Japan, which is a little bit more closed off as a market. So if you look at the developments of our crypto industry, Japan is highly regulated. Crypto is almost treated as securities and is highly regulated in Japan, and in Taiwan, crypto is regarded as the assets or the commodity. In Taiwan, we call it virtual commodity, so it’s considered an exchange of goods when you buy and sell crypto, so it’s not heavily regulated and it’s almost a self-regulatory ecosystem, so it encourages people to participate as well. And also from the legislative point of view, we don’t want to early regulate, we want to make sure that we understand the ecosystem fully before we regulate them.

Joyce Yang

Which countries do you model after if you look to anyone?

Jason Hsu

Yeah, that’s a really good question. So if you look at around the world, say it’s really divided into 3 trends. One is like China, which is completely crackdown, I believe they will start their own game plan or game rules. The other system is like Korea and Japan which is highly regulated, another one is like Malta or some smaller islands who traditionally are known for financial transactions-based business model, but Taiwan is sort of in between, because we have a quite solid power and software industry and we are an export-driven economy, and so for a long time we are known for moving goods from one place to another, and which is an export economy.

And so we don’t really look to any models per se, but there are two things we wanted to emphasize; one is to create a healthy and a sustainable business ecosystem for crypto and Blockchain; and secondly, we want to create a well-regulated and healthy legal system as well for the consumers, we want to make sure that the industry growth is ensured and also the consumers protection is also ensured. So there are two ways that we are developing this industry.

Joyce Yang

How are the Taiwanese locals trading crypto in general?

Jason Hsu

So in recent years, crypto has been unfortunately associated with speculations, scams or ICO’s, and that’s why I’m making my mission to provide right educational knowledge of the industry. Most of the Taiwanese people see cryptocurrency as an investment opportunity and that’s why it’s important that the right regulation is in place. Also the education is so important, that’s why I create a platform between our Ministry of Justice, of Investigation Bureau and FSC; Financial Supervisory Commission, to build up the entire money fraud mechanism and as well as launch self-regulatory organization. So that industries can work with government as well as they can come and self-regulate themselves. I believe that we’ve only scratched the surface for the industry adaptation. I think the key challenge is how do we make sure the average person, average citizen can feel the benefit of using cryptocurrencies and using the services enabled by Blockchain. So I think governments must regulate the industry; the scams and fraud are punished, and yet good behavior and good commercial entities are encouraged. I also believe that a smaller amount of the crypto use by citizens on daily basis can be encouraged so that people feel the convenience and benefits of using cryptocurrency versus using credit cards or other payment methods. And having said that, I believe the institutions you know, more linkage should be built among banks and institutions to build up the real time clearing system. You know, today’s financial system is so cumbersome and it’s just so difficult and heavy duty, and I think what we see crypto and Blockchain is alternative to today’s already crowded financial system.

Joyce Yang

Do you think WeChat or Alipay can take over these things though?

Jason Hsu

I think China runs the whole different job operation in itself, I think no one can compete the way Chinese government’s want their businesses to run in certain way. I mean, today’s Alibaba is a huge company but unfortunately, it still falls under Chinese government’s control. I think WeChat has its own merits and also deserve its place in innovation and improving the livelihood of the people, but I doubt it would be authentically watching quick-paced. It’s more of a centralized financial tool that is just easy to use and it’s also easy to be monitored, surveilled as well, plus I believe that the real challenge for today’s world in terms of Blockchain adoption is how do we get technology in the hands of the people who need it you know, for example, people in developing countries? How to ensure the politicians or corrupted regime don’t explore the technology in another way for example, the way the Venezuela government does you know, instead of the corrupted politicians use it to milk the money, and I feel how do we introduce Blockchain to solve the issues of hyperinflation in Zimbabwe or Venezuela, I feel that’s the challenge is we should all address together.

Joyce Yang

Yeah, where does Taiwan stand in all of these and how do you engage with companies local to Taiwan, and on top of that how should companies outside of Taiwan talk to you and the regulators?

Jason Hsu

First of all, Taiwan is a very open place, we have a high concentration of engineering talents and also integration of hardware and software industries, I think we have a Science Park in Hsinchu, it’s about 40 kilometers south of Taipei, so that’s very strong TSMC’s based out of the Science Park, but I think our strengths in this space really lies in the talent, and also I would say the power and know-how in putting a Blockchain solution in connected device.

So for example, I work with the company called HTC; yeah, my friend Phil who is the head of the Blockchain at HTC, he’s coming out with a crypto phone, so I now work with them, to provide the crypto phones to the unbankable or the unbanked people, to provide them with access to financial transaction. So I think that you know the real benefit and contribution. And in terms of policies and governments incentives programs, we are launching a Blockchain economic zone, Its 12,000 square meter space in new Taipei city, which we were used to prototype lifestyle experience enabled by Blockchain. So imagine going there or you have Blockchain Clinic, Blockchain restaurants, supermarket, all the vegetables and the meat and sourced trays on Blockchain, and there will also be incubators and accelerators. And also we’re planning to introduce research labs that are basically specialized in technology breakthrough of the Blockchain and scalability and the transaction speed. So I think it’s really exciting, we are opening in the end of the year 2018, so I’m super excited to me. And I also believe that as a part of our national strategy, we are using Blockchain to create digital identities, which the technology can be created and then licensed to other countries who can use them to either in a financial transaction or the identity authentication or to solve the refugees issues. Also, we’re trying to develop an additional citizens program much like Estonia to allow international skill workers to register as citizens digitally for Taiwan. So I think it’s really moving beyond the country borders, I think that’s the beauty of Blockchain because it blows the geopolitical constraints. It also gives people to have access to resources.

Joyce Yang

Taiwan seems to be focused more on decentralized technology.

Jason Hsu

Because I keep talking about it everywhere I go, I just I talk about all the wonderful things in Taiwan. So I’m excited about this Blockchain economic zone because we’re basically open for international businesses; for Blockchain companies to come and set up their R&D labs there and like employ our cheaper but equally talented capable engineers in Taiwan than Silicon Valley, and also we provide real use cases for watching developers to develop their use cases. For example, now we’ve come up with 16 industries that we would like to adopt and implement Blockchain going from agriculture, IOT, transportation, medical to intellectual property, all sorts of stuff, so that’s super exciting to me. And also we’re working on to build Taiwan as a digital asset hub, and so that’s why I’m excited about understanding and creating the Legal Framework for Security’s token, and I think there’s a lot to look forward to.

Joyce Yang

Just a quick announcement; this ad spot could be yours. If you are looking to advertise your crypto project or business, please email [hello@globalcoinresearch.com] for sponsorship opportunities on global coin research podcast.

Now back to the podcast; we’re here talking with Jason Hsu or “crypto congressman from Taiwan.” So it seems like Taiwan is more focused on the technology; what about the exchanges?

Jason Hsu

I did a talk with Vitalik in August in San Francisco, and basically I was saying I feel the motivation driving cryptocurrency and Blockchain should not be just about money seeking, it should be about how the technology can create a fundamental shift in our trust system. So we want to focus on that, we want to focus on building Taiwan as a Blockchain tech island, and with the tech island when we build TSMC and semiconductor industry, we want to start building blockchain enabled industries so I feel you know, how Jack Ma the CEO of Alibaba said; he said this a few years ago, he said in the future every company would be an Internet company, so they come up with this term called Internet Plus, and I feel going forward we’ll be going from Internet Plus to Blockchain Plus. And so consider Blockchain as a layer in the bottom of every single connection point, and that would allow you to basically reorganize infrastructure in terms of logistics, supply chain and finance transaction. And if you look at the evolution of Internet, basically the coming of the email solved the communication problem, and I feel the birth of the Blockchain was to start solving the transaction problem. This would be two of the most significant internet breakthroughs in human history, so super huge if you see this all the rules economic rules can be rewritten because of this. So that’s why certain industries are paranoid or terrified and they are trying to fight but I feel those who embrace it, those who keep up with it will emerge as winners.

Joyce Yang

And you talk to Vitalik pretty often; what’s his view and thoughts on Taiwan?

Jason Hsu

Obviously recently he’s come under some attack and a criticism because of the dropping of the Ether price, but I would say he’s grown fully accused because he’s such so pure, he’s really one of the few people I know in the space still hold up to ideals. He’s seen Taiwan basically a well of the resources and talent in Blockchain. I mean, we have the will and we have the people, and that’s why he spends a good amount of time in Taiwan and he’s hanging out with politicians like me, trying to understand how he can be helpful in creating Blockchain national strategies and legislations, but I feel we need more people like him in a space because I also said this in a previous our interviews with other outlets that, I feel the market itself is going through a self-correction course. And it’s not a bad thing you know bear markets are not bad thing, but what I worry is during the first Internet bubble, two companies working well. For example, you know second first bubble came Yahoo you know, those Microsoft, those companies, and the second bubble for Facebook, Google and some stuff. But I worry that for the crypto bubble, nothing will be left other than a bunch of angry investments, and that would be very sad. So I feel now it’s a good time for the regulators to come in to really start regulating and to come up with the suitable regulations for industry, and I also think that the exchanges must come forward to work with the regulators because exchanges are practically the engine of the ecosystem, and the day to day transact a huge amount of value and they should be the first one to be regulated, and must be compared with regulations.

Joyce Yang

So have you started regulating exchanges yet?

Jason Hsu

No, we started regulating them now. Like as a first step, I think 3 days ago, I just introduced a legislation to regulate exchanges for money laundering and also fraud as well in the entire money laundering law. I added a particular article on crypto and exchanges, and secondly I formed the self-regulatory organizations so these exchanges must disclose certain information. Also the purchase listed on the changes must also provide investors background and also issued white paper before they start soliciting money. And also, exchanges must hold an equivalent amount of assets as the investors, and they must have separated their assets of investors’ money. And also, they must have pretty strict customer onboarding process and authentication process as well, very strong KYC and AML process, all sorts of things.

Joyce Yang

What are the countries we could look to for regulation guidance?

Jason Hsu

The US is an interesting place to look at. People think that US is slow, but I think you know slow it doesn’t mean bad. Yeah, and I feel some of the most successful Blockchain or crypto companies will eventually come from the US because if you look at traditional exchange operation; NYSC, or NASDAQ or FTSE or London Stock Exchange, they have very very complicated and strict and serious compliance regulations. And they don’t come overnight, and today’s crypto exchanges including some of the more popular ones like Finance, I don’t think they can comply with the U.S. regulations. So I think at the end of the day when the strike comes, and people will start going with the regulated ones that have trouble being regulated, I think that’s something it’s really worth looking at. So basically at the end of the day, point of regulation is certain; people would be looking to engage with exchanges that now are regulated, not the other ones that are unregulated. Yeah, I’m also concerned about the software technology that powers exchanges and I’m curious to know how insecure these companies, IT is. And because I know certainly there’s only a handful companies that are powering today’s 5 most popular exchanges. I’m concerned about their ability to resist hacks and also do they talk with regulators, do regulators understand, what’s going on with the software platform. Yeah, so those are sort of things that I’m curious to know.

Joyce Yang

Yeah, I feel like that is mandatory and it’s foundational for the financial industry.

Jason Hsu

The more important; when you start talking nice in their assets or when the what we call an asset digitization to become the force in a near-future to be more exact, I feel there will be a lot of opportunities for hacks and fraud and you talk about you know real estate or just assets you know, looking at where serious problems are.

Joyce yang

It sounds like you’re close with Ethereum. Anyone else? How do you work with other projects?

Jason Hsu

I’m in touch with all of them you know, I’m in touch with EOS, Ethereum, Tezos, Zcash; I’m just trying to understand holistically how each platforms technology can apply to certain situations and understand their constraints and limits, and trying to tell when or whether if they’re lying you know, when they say they would solve certain issues but they’re not. I’m also educating myself when I get a chance to talk to them, because these things are so new, you just can’t rely on one single source. And also I feel this is very much like the beginning of that calm, and everyone having issues with each other. So it’s better to compare the notes with everyone; I don’t mean to mention Vitalik more often because he was the one who introduced me to this field and he and I talk more often. But for other platforms, I’m in touch with them as well.

Joyce Yang

What’s your view on these different Blockchain projects?

Jason Hsu

If you look at the global distribution of the notes, I don’t think we can have that many public chain alone just because of the computing power and the consumption of energy and also the current mining efficiency. And you have like moldable chains that claimed they would be the dominant chain. So this type of ideological fight I feel has to come to a certain point where they have to fulfill their promise; number one. And secondly, each chain must have a delegated role in addressing certain applications. For example, I think on Ethereum, it is definitely a smart contract and how can you take that to the next level and then to create a more fluid transaction and also to make sure that people just don’t use the smart contract to issue ICO’s, because I feel that’s the only purpose that serves right now. And certainly, there are other applications trying to solve that problem you know, like main network or other problem they say they are solving the issues that Ethereum has, whether it’s interesting to continue watching that. And I feel one of the most important issues that needs to be addressed, I want to see real authentic applications to this is the digital identities. I think there is a lot of problems in today’s growth of the data privacy and also the data ownership and as well as identity issue. And if you can combine the digital identities with the idea of creating a trust us system as well as a biometric recognition, I think you would have a completely new way of interpreting I guess the identities. And I think that’s very very helpful as we go along because I feel in today’s internet world, and we become your pinnacles. And I feel the decentralized… I mean, we kind of fulfill this promise, otherwise it will be a waste that Bitcoin came out and that Ethereum came out and then become a party of the rich people. And I think it’s unfortunate now that the technology doesn’t get to the hands of the people who need it.

Joyce Yang

You are the “crypto congressman.” And how many other people in Taiwan are helping you with this mission in the regulatory body?

Jason Hsu

I launched a bipartisan parliamentary coalition for Blockchain, and I think it’s still a very small group in the parliament, we have 113 legislators, about 16 of them is in the caucus of the crypto, one tenth, but it’s getting a significant traction in a public media eventually to see after we deal with this entire money laundry for our act, I think we will definitely be opened up a lot more crypto companies to come to Taiwan. And also the Blockchain Economic Zone that we’re launching it’s also hardly promising as well.

Joyce Yang

Is there a technical team behind you as well?

Jason Hsu

I read a lot, and I certainly don’t believe in everything I read. So I would just take the things that doesn’t make sense or I don’t understand and ask people. And different people have different interpretations, and right now I’m building a global brain trust. I recently issue a one crypto world token; it’s called OCW. It’s actually a very interesting concept, so I feel the issue with crypto and Blockchain is transnational and it goes beyond country borders. So I feel like the world must come together to build a narrative or network to solve this issue. So I issue a one crypto world token ERC20, it’s what we call a proof of support token issue a thousand units without with zero value. So it cannot be traded it changes, but people who I give a token to, serve as my advisory, and I will form a super note for the first 100 tokens that I issue, and they would be serving as my super note advisory. So whenever I have a policy that I want to push, I will post it and then those who have token can vote or they can motion to a different proposal. And so for the ones that I…. I’ve given now 12 tokens and so if Vitalik gets the first one, second is the number 001 is Vitalik, and 002 is former UN Secretary General Ban Ki Moon, and also a bunch of others. Yeah, I’m looking to give some away of when I’m in New York and in Harvard as well. So you can recommend people that I should talk to build up this super note, and I plan to launch one crypto world foundation to build a long-term sustainable development for Blockchain for Impacts. Like I said, I feel I want to see more social and economic impacts being created by the technology and by the use of crypto. So I come up with 16 areas of research and development, and also problems that I wanted to develop solutions for, and so the foundation will be delegated in solving these issues.

Joyce Yang

Have you thought about those problems?

Jason Hsu

Yes. So for example, how do we use Blockchain to create an authentic food program for the UN and for the clean food and clean water to be delivered to those who need it using Blockchain to solve the hyperinflation problem, using Blockchain to provide medical data research and etc. And also since I’m a politician, I’m particularly interested in applying Blockchain to politics and public governance. So how do we increase the accountability in politics and also ensure a clean and transparent campaign financing and campaign donation through Blockchain, and all sort of these things are quite illuminating to me because I feel this is always a huge misconduct, a huge gap between technology and organizational design, because technology growth is exponential but human behavior and human thinking is linear. So how do we bridge the two is quite interesting to me.

Joyce Yang

I’m sure what holds you back usually it’s probably the people issue and less of the technology.

Jason Hsu

Yeah, especially as I come from a Tech entrepreneur background. Being in politics slows me down a thousand times. Even I work just as hard if not harder as a politician than I was as a tech entrepreneur, but at a speed which I wanted to proceed, it’s definitely a little bit friction; let me say this. Yeah, but I’m applying my entrepreneur spirit in my political work. So I’m super excited about this one crypto world idea, I really hope to build a trust network or a brand trust that think along the same wavelength or some thinking, I should be very very excited. And you could be good to help me nominate a few people I should award the token to. I would send you the 16 areas that I wanted to solve with the Blockchain permutations, and then you can look at those if you find the right people that I should approach, let me know.

Joyce Yang

What do you think the Blockchain world will evolve into in the future, especially in Asia?

Jason Hsu

Well, Asia is complicated. You have China as a big market, South Korea and the Japan are somewhat conservative and also kind of closed off. The whole Southeast Asia is fragmented, with Singapore sort of positioning itself as crypto hub, Taiwan is sort of positioned quite strategically, connecting what I call a Pacific Rim; if you’re going from Korea, Japan, Taiwan, Southeast Asia. So I feel if we can develop some sort of consensus network, I think it will be very powerful, and that’s why I launched an Asia Blockchain Alliance, connecting this Pacific Rim, they are 8 countries in the Alliance, so I have people similar to me in Parliament in different countries. So we meet online, we talk, we share our thinking on crypto, and I feel it’s also serving as quite a useful resource as well. I feel Asha would be definitely leading the way in the crypto and Blockchain adaptations. And just because U.S. is a very mature market, I feel a lot of the corporations are still resistant to change, and Asia I think is somehow quicker to adapt. So all those things are quite interesting.

Joyce Yang

Do you think by the end of the year, Taiwan will have the most Blockchain implementation than most other countries?

Jason Hsu

Yeah, I hope so. And I also hope the way I am approaching or at least I am leading Taiwan to approach is a more sustained way other than countries just quickly jump in and trying to make a quick profit out of it. And I’m concerned about certain countries that you know, the countries like the Philippines, this is Blockchain special economic zone, it’s like the whole island; the Island of…. I think the name is Kojai, it’s called Ceasar, Kojai special economic zone, I feel it’s little bit dangerous because they are approaching it like an online gaming sort of approach. Basically government selling licenses, and I don’t know.

Joyce Yang

Thanks so much Jason. To learn more about the topics discussed today check out the descriptions under the podcast episode. Also be sure to follow us on Twitter at [Globalcoinrsrch]. New episodes come out once every two weeks, so if you haven’t already done so, rate, review and subscribe on Apple podcasts. If you liked this episode, share with your friends on Facebook Twitter or LinkedIn.

Thanks for listening.

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