Taiwan Prohibits Crypto Providers to Be Granted Merchant Status
A memorandum was sent to the banking industry in Taiwan by the Financial Supervisory Commission (FSC), which is the primary financial regulator in Taiwan. The communication emphasized that VASPs should not be awarded merchant accreditation in dealings with credit card users. Because of this, the use of credit cards to buy bitcoin on the island will be practically prohibited.
Yesterday, the Financial Supervisory Commission sent a letter to the Association of Banks. In the letter, the Financial Supervisory Commission warned the members of the Association of Banks that digital assets are extremely speculative and unsafe, and that the cash flow is complicated and difficult to track effectively.
The governing body has also highlighted that credit cards are generally used as consumer payment instruments and should not be confused with investment and wealth management instruments or payment instruments that are involved in highly speculative, extremely-risky, and large-leverage transactions. It was connected to the time-honored practice of discouraging consumers from utilizing their credit cards to pay for a variety of activities, including online gambling, stock trading, futures trading, and option trading, among other things.
Within a period of three months, the FSC requires banks to demonstrate that they are in compliance with the new laws. After that, the audit unit is tasked with conducting an internal compliance review and reporting its findings to the relevant regulator. It is not the first time that the FSC has voiced concern about cryptocurrencies or taken action in response to them. In 2017, the agency issued a series of press releases drawing attention to the risks associated with virtual assets. These announcements were intended to warn the general public.
In July 2021, in response to a recommendation from the Financial Action Task Force, Taiwan revised its anti-money laundering (AML) rules for cryptocurrency exchanges.
At the end of June, the governor of the Central Bank of the Republic of China (Taiwan) campaigned for a design that included no interest for the central bank digital currency (CBDC) pilot. At this time, Taiwan is in the midst of the second phase of the pilot program for its CBDC, in which consumers of five selected Taiwanese financial institutions are being given CBDC.