Taiwan’s ‘Crypto Congressman’ on Infusing Tech into Government

By Dave Sebastian |  May 7, 2019

In September 2017, the Chinese government made the decision to block websites offering initial coin offerings for new cryptocurrencies in mainland China. But across the Taiwan Strait, Congressman Jason Hsu of Taiwan had a different response: We welcome cryptocurrencies and blockchain.

Congressman Jason Hsu of Taiwan, who wants to make the island a haven for blockchain technology and cryptocurrency.

The message earned Hsu the nickname “Crypto Congressman” from Ethereum co-founder Vitalik Buterin.

In Taiwan, which China regards as a breakaway province, but is self-governing and autonomous, Hsu aims to bridge the gap between innovators and the old guard.

“I made it my mission to bring technology closer to public policy, and serve as the interface,” Hsu told InnoLead. “It is very clear to me that you need someone who can speak the language on both sides…who can speak the language of law and legislation and who can speak the language of the technology and innovation.”

Formerly a Silicon Valley entrepreneur, Hsu moved back to Taiwan in 2009 and began working in government. As an advisor to the prime minister, he focused on developing policy related to innovation and technology. He was nominated as a legislator-at-large to the Taiwanese parliament in 2015, representing no singular district but focusing on technology broadly. Since then, he has worked on legislation related to technology, cybersecurity, autonomous vehicles, and virtual currency. One of the issues Hsu is obsessed with: making Taiwan a blockchain island.

By making it clear that Taiwan is open to blockchain and cryptocurrency innovation, Hsu said the island nation “will have a really good opportunity in attracting global talent,” noting that Taiwan has a supply of “cheaper engineers [than in Silicon Valley], but with the same if not better talent.”

To achieve that, Hsu in December 2017 helped create Taiwan’s fintech regulatory sandbox, which allows chosen startups to launch new products and services with some immunity related to existing regulations, for up to a year.

But Hsu’s endeavors are not without roadblocks, one of which is introducing new technologies to echelons of older and more conservative Taiwanese officials. During a conversation with InnoLead in March 2019, Hsu shared the challenges he has faced in instilling a culture of innovation in government. Edited highlights from the conversation are below.

Innovating within Taiwanese Bureaucracy

We live at a time in history where technology is disrupting everything from our daily lives to public servers. … [A]nd the laws and regulations that we have right now were mostly created before the internet age. … So I think [it’s] my goal to transform or [digitize] the country and the public sector.

There’s always a friction when it comes to introducing innovation to the public sector, particularly those who are already working so comfortably in the system. For example, fintech is a technology that has a lot of potential to disrupt the financial sector and also create real opportunities. But the ones that are most conservative in sharing their data or working with startups are exactly the same group of people that already benefit from the existing power structure. So there’s always a lot of friction. But…we host a lot of hearings [that] we broadcast live, and invite people to comment on those public affairs. And politics is a very old game. It’s almost very, very difficult to innovate, but I think once we find an anchor, then we can implement concrete actions. Then, we are ready to prove to people that things can be changed.

…It’s not the people who are in the decision-making circle that can be [the] first ones to be impacted, but it is the daily consumers who use [the] Uber app, who use Airbnb, or some kids in the garage working on the latest project or startup idea. But if politicians fail to understand us, and they only turn blind eyes to the existing trend, then one day they wake up [and] they might realize that people [have] abandoned them. 

Understanding Government Spending 

If you look around technologically, you realize there’s so much to be done. [One question]  you would ask is, “[Do] you know where we spend our taxpayers’ money?” The thing I would propose is for politicians to make decisions based on numbers, based on scientific analysis, based on logical reasoning, rather than pork-barrel politics. So that’s why I’m trying to introduce [a] sort of infographic [for] spending on the budget, and help them visualize where our money [is going].

Take blockchain, for example. …I must find my partners in crime. So first of all, I gather around a [bipartisan] group of legislators from both sides of the aisle. And then we set up a caucus…in Parliament, and we develop strategies, we work with different groups — academic specialists and industry experts — to develop ideas. And also whenever there is legislation or some executive order waiting to be published, we always invite outside experts and entrepreneurs to sit in that meeting and also to consult with the government before they make any public announcements on those regulations. We make sure that government people are encouraged to work with entrepreneurs, and they are encouraged to get out of their comfort zone, and they are encouraged to take risks. … This is a way for me to change the government. It is that through working with entrepreneurs [that] government officials — especially mid-level officials — are encouraged to think like entrepreneurs and to take risks and then to innovate.

Government Response to Cryptocurrency 

It’s been very, very slow moving. … Taiwan is comparatively smaller than other bigger countries, and so we get a little head start with crypto stuff. And also I believe countries…like China and the US are skeptical about crypto, because they are afraid of losing control.

And also…the DLT — decentralized ledger technology — is becoming a threat to the centralized government system for Taiwan. I feel we need to take this opportunity to turn this into an advantage for ourselves. So, for example, use blockchain to build up our public infrastructure system and use blockchain to implement IOT, smart cities, radical data, and all that stuff. So on the side of blockchain and crypto, it’s moving fast, but for other things — for example, artificial intelligence — we deployed quite a bit of resources. But compared to China and the US, we are still considered very, very small in terms of resources spending.

[The] thing that we are working on right now is public voting on blockchain. When it comes to elections, I think…there’s always a lot of potential for technical errors. For example, ballot-counting and some technical issues always happen. But now we are introducing electronic voting on blockchain. Everything can be recorded in real time and with authentication.

Work Culture at Hsu’s Office

We actually work like a startup office. It’s very fast-paced. Our people are not like regular legislators’ assistants. They…move things fast, and they work under a lot of stress, but I think they really enjoy the type of environment where they can really shine and then make a difference.

… Two things are important. I think one is transparency. The other is tolerance for mistakes. I think as long as people can be transparent within their organization, be really straightforward, and then allowed to make mistakes, I think things [would be] improved.