Taiwan’s Financial Supervisory Commission (FSC) believes cryptocurrencies are risky and speculative assets. As a result, the regulator intends to prohibit the use of credit cards for crypto purchases.
Taiwan to Ban Credit Card Crypto Purchases
According to local reports, the FSC sent a letter to Taiwan’s Association of Banks earlier this month, asking credit card companies to stop facilitating payments for crypto-related merchants. The regulator also wants card providers to stop processing payments for stocks, futures, options, online gambling, and other high-risk transactions.
The FSC noted that credit cards should serve as a payment method for goods and services instead of facilitating financial investments and speculative trading.
The report added that credit card providers who currently service crypto merchants have three months to comply with the FSC’s requirement. After the deadline, the companies must submit an audit report to the regulator to show compliance.
Taiwan’s Central Bank Warns Against NFT Investing
Meanwhile, this is not the first time Taiwan has taken a tough stance against crypto-related activities. In April 2021, the country cautioned against investing in Bitcoin and other crypto assets, citing the “highly speculative” native of the asset class.
Three months later, Taiwan enacted anti-money laundering laws for digital asset service providers in the country. The AML rules require local exchanges to report transactions above $17,900 conducted in cash. In addition, customers must complete a mandatory know-your-customer KYC requirement before using any crypto exchange.
In June 2022, Taiwan’s central bank reportedly warned against investing in non-fungible tokens (NFTs) because the NFT market is full of fake transactions.
Taiwan to Launch CBDC
Despite its stringent stance against crypto assets, Taiwan is on the verge of launching a central bank digital currency (CBDC). Last month, the country’s central bank said it had been working on CBDC for the past two years, with retail trials already completed for the prototype.
Although the bank did not reveal the launch date for the CBDC, it noted that the digital currency would allow citizens to use a digital wallet to make payments without the need for a credit or debit card.