The Financial Supervisory Commission (FSC) of Taiwan, one of the main financial regulators, issued a note addressed to the banking sector in which it indicates that they should not grant virtual asset providers (VASPs) the status of merchants in operations with credit card holders. That means a de facto ban on buying crypto with a credit card on the island.
As local media reported on Thursday, July 21, the Financial Supervision Commission sent a letter to the Banking Association in early July, reminding the members of the Banking Association that virtual assets are highly speculative and risky, and that cash flow is complex and difficult to effectively control transactions.
The regulator has also specified that credit cards are essentially payment instruments for the consumer, not for investment and wealth management or for the payment of highly speculative, high-risk and highly leveraged operations. He referred to the long tradition of preserving credit card holders from online gambling, stocks, futures and options, among other things.
The FSC requires banks to adapt to the new guidelines within three months. Next, the audit unit must review its internal compliance and report the results to the regulator.
This is not the first time that the FSC has taken action or expressed skepticism about cryptocurrencies. Last year, the regulator issued several press releases to remind the public of the risks related to virtual assets.
In July 2021, Taiwan enacted renewed anti-money laundering (AML) requirements for crypto exchanges, based on the recommendation of the Financial Action Task Force.
At the end of june, The Governor of the Central Bank of the Republic of China (Taiwan) has recommended an interest-free design for the country’s Central Bank Digital Currency (CBDC) pilot program. Taiwan is currently in the second phase of its CBDC pilot program, in which its central bank provides CBDC to five selected Taiwanese banks for distribution to consumers.
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