Taiwan’s Financial Supervisory Commission (FSC), the banking, insurance and securities market regulator, is set to ban the use of credit cards to make purchases of digital assets.
In a statement to local media UDNthe FSC revealed that it had sent a letter to the Bankers Association of the Republic of China (BAROC), which ordered credit card issuers to stop integrating digital asset platforms as merchants.
In the letter, the FSC warned of the volatile nature of digital assets and the risks associated with trading them, especially to facilitate money laundering.
The regulator added that credit cards should only be used as a payment tool for consumers and not for online gambling, stocks, futures, options and other highly speculative, high-risk transactions. risky and highly leveraged. The FSC says credit card acquirers have three months to adjust to the new requirements.
The directive further strengthened Taiwan’s AML/CFT regulations on digital assets that came into effect about a year ago. The rules require exchanges to report digital asset transactions worth more than NT$500,000 (about $17,900 at the time) and complete KYC for users.
In January, the law was expanded to include institutions that operate digital asset vending machines. As reported in Taipei Timedigital asset vending machines were found to operate largely outside of regulation in an investigation by lawmakers.
Taiwan plans to launch a CBDC
Taiwan is among the long list of countries planning to launch a central bank digital currency (CBDC). The central bank revealed this month that its proposed CBDC will enter the second stage of development this year.
At this stage, the central bank will focus on designing the digital currency, including setting its policy to make it interest-free, making it work offline, and increasing 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 had regulations in place to guide the issuance of securities token offerings (STOs) since 2019, when it started working on the CBDC platform. The law imposes a hard cap of NT$30 million ($973,489 at the time) as the maximum amount that can be raised through blockchain-based token offerings.
Watch: BSV panel Global Blockchain Convention, Law & Order: Regulatory Compliance for Blockchain & Digital Assets
New to Bitcoin? Discover CoinGeek bitcoin for beginners section, the ultimate resource guide to learn more about Bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.