Taiwan bans crypto buying with credit cards

Monday 8 August 2022 12:27 CET | News

Taiwan’s Financial Supervisory Commission (FSC) has asked credit card companies to ban payments for crypto-related purchases, as the regulator believes these assets are risky and speculative. 

Local-based crypto exchange Max MaiCoin trades over USD 4 million in USDT in 24 hours and is closely followed by massive trades on ETC, BTC, and Sandbox’s crypto, SAND.

FSC regulation

According to the FSC, credit cards should be used only as a payment method for goods and services and not facilitate speculative trading and financial investments, which could easily lead to debt and a high fiscal burden. Credit card providers who currently serve crypto merchants have three months to comply with the latest FSC requirements and, once the deadline passes, companies must submit an audit report to the regulator. 

Taiwan’s strict policy against blockchain technologies, cryptocurrencies, and other digital assets is well-known internationally, as only in July 2022 warned the population about the risks of NFTs as investments. According to the region’s central bank, less than 30% of investors profit from selling an NFT, while over 33% of all NTFs produced do not sell at all, proving that the main population is still reluctant when it comes to these unique digital assets.

Taiwan’s Financial Supervisory Commission (FSC) has asked credit card companies to ban payments for crypto-related purchases, as the regulator believes these assets are risky and speculative.

The regulator mentioned that credit cards are now used as payment tools to supply irresponsible financial behaviours, including funding online gambling, stocks, futures, options, and other types of transactions which are considered high risk, and this will only lead to more debt and less financial stability among investors.

The rise of CBDCs

At the same time, the Taiwanese central bank doesn’t dismantle the idea of a regulated digital currency and set out a series of next steps for the country’s CBDC (Central Bank Digital Currency) experiment, in July 2022. The new CBDC would allow people to use a digital wallet and make payments without requiring the use of a debit or credit card, but it is still unclear when the pilot will be launched.

Southeast Asia’s take on CBDCs

While Taiwan’s state policy regarding the adoption of CBDCs remains unclear, other Southeast Asian and Eastern Asian countries are facing an undecided crowd. China enters its latest phases for the adoption of the e-yuan, while the Bank of Japan announced it will discontinue its project, for now, due to the population’s lack of interest. Similarly, the Central Bank of Australia sees a weak case for a retail CBDC, due to the same limited interest.

On the other hand, Thailand is now piloting a digital and Indonesia is considering using a retail CBDC to boost the benefits of a digitalised economy. Vietnam and the Kingdom of Bhutan are reportedly looking into similar projects, while Cambodia already rolled out its digital currency back in 2020.

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Keywords: financial institutions, financial services, CBDC, digital wallet, digital currency, credit card, debit card, cryptocurrency, cryptocurrency exchange, crypto, crypto asset, NFT, digitalisation
Categories: DeFi & Crypto & Web3
Companies: Financial Supervisory Commission Taiwan
Countries: Taiwan
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DeFi & Crypto & Web3

Financial Supervisory Commission Taiwan

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