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The FSC also added that credit cards cannot be used for stocks, online gambling, futures options, and other transactions in Taiwan.
Taiwan is set to issue a ban on all crypto purchases from banks using credit cards, according to a new report. The country’s financial regulator, the Financial Supervisory Commission (FSC), has sent a letter to the local banking association, ordering credit card companies to halt any business with cryptocurrency firms.
The FSC, according to the report, served the banking association the letter in the early stages of June, in which they asked credit card agencies to stop bringing on crypto platforms as merchants as well as warning them of the risks associated with digital assets.
The FSC also added that credit cards cannot be used for stocks, online gambling, futures options, and other transactions in Taiwan. Credit card companies now have three months to adhere to the new rules, according to Taiwan’s financial regulator.
In July last year, Taiwan saw a new set of rules implemented for cryptocurrency service providers in the nation which were aimed at combating money laundering. The development followed regulators across the globe speeding up crypto rules around the globe after the crypto market took a big hit.
According to Taiwan’s Financial Supervisory Commission, the new crypto rules, which were in line with guidance issued by the Financial Action Task Force, required exchanges in Taiwan to report transactions worth over NT$500,000 (US$17,900) conducted in cash. Cryptocurrency exchanges were also required to fulfill “know-your-customer requirements” to ensure the identity authentication of their clients, per the new rules.
Taiwan experienced a surge in crypto activity following China’s crackdown on cryptocurrencies in 2021 and was expected to become the new crypto hub for the area. The recent market crash has, however, dimmed the buzz around the local market now.
Earlier this year, the country completed trials of its prototype central bank digital currency (CBDC) in technical simulations, clearing the path for its release to the general public for retail use.
According to central bank governor Chinlong Yang, Taiwan began studying and testing a retail CBDC in September 2020. He added that the central bank has also partnered with at least five Taiwanese commercial banks to create a retail payment system.
Yang stated that the central bank won’t consider an official issuance until it can inform the general public about the purported advantages, create regulations, and establish a solid legal foundation. The president also added that the ideal scenario would be for the central bank to provide banks with CBDC in exchange for distributing it to the general population for retail use.
In March this year, MaiCoin Group, which operates Taiwan’s largest cryptocurrency exchange, announced that it was considering going public on the Nasdaq stock market, just two years after it was launched.