Taiwan’s banking, insurance, and securities market regulator, the Financial Supervisory Commission (FSC), is set to ban the use of credit cards in making digital assets purchases.
In a statement to local news outlet UDN, the FSC revealed that it had issued a letter to the Bankers Association of the Republic of China (BAROC), which directed credit card issuers to stop onboarding digital assets platforms as merchants.
In the letter, the FSC warned of the volatile nature of digital assets and the risks associated with trading them, especially in facilitating money laundering.
The regulator added that credit cards should only be used as a consumer payment tool and not for online gambling, stocks, futures, options, and other highly speculative, high risk and high-financial leverage transactions. The FSC says credit card acquirers have three months to adjust to the new requirements.
The directive further reinforced Taiwan’s digital assets AML/CFT regulations which came into force about one year ago. The rules require exchanges to report digital assets transactions worth over NT$500,000 (about $17,900 at the time) and fulfill KYC for users.
In January, the law was expanded to include institutions that operate digital assets ATMs. As reported in Taipei Times, digital assets ATMs were found to be largely operating outside of regulations in an investigation conducted by the legislature.
Taiwan mulling over launching a CBDC
Taiwan is among the long roster of countries considering launching a central bank digital currency (CBDC). The central bank disclosed this month that its CBDC project would enter the second stage of development this year.
In this stage, the central bank will focus on cracking the design consideration of the digital currency, including defining its policy to make it non-interest bearing, making it work offline, and scaling the operational performance of the system.
So far, the island nation has conducted extensive trials of its CBDC platform with banks and plans to onboard the public soon for real-world transactions.
Taiwan had regulations in place to guide the issuance of securities token offerings (STOs) since 2019 when it first started working on the CBDC platform. The law places a hard cap of NT$30 million ($973,489 at the time) as the maximum amount which could be raised through blockchain-based token offerings.
Watch: The BSV Global Blockchain Convention panel, Law & Order: Regulatory Compliance for Blockchain & Digital Assets
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