According to local sources, credit card-based cryptocurrency transactions will no longer be permitted in Taiwan, as the island nation’s regulator views virtual currencies as risky and speculative investments.
In a letter to the banking industry association earlier this month, Taiwan’s Financial Supervisory Commission asked them not to provide “merchant status” to digital asset providers that serve credit card customers.
Reports indicate that credit card processors must be attentive and should not exploit virtual assets. According to the studies, credit card corporations feel that credit cards are only consumer payment instruments, not investment or wealth management tools capable of highly speculative financial leverage transactions.
Accelerating Cryptocurrency Regulation Around According to the reports, credit card issuers now enable crypto merchants to have three months to comply with the FSC’s rule. Providers must provide a compliance audit report to the agency after the deadline.
In recent months, regulators throughout the globe have accelerated the implementation of digital currency regulations, as global financial markets have taken a big hit this year, with several famous corporations liquidating and billions of dollars leaving the sector.
After China started clamping down on cryptocurrencies last year, Taiwan saw a rise in activity and was predicted to become the region’s next bitcoin superpower. Since then, however, nothing has been spoken about the local cryptocurrency industry.
The FSC was explicit: “Given the very speculative and high-risk nature of virtual assets, credit cards should not be used for virtual asset transactions.”
Additionally, the FSC has barred the use of credit cards for online gambling, stocks, futures, options, and similar activities.
On the recommendation of the Financial Action Task Force, Taiwan amended its Anti-Money-Laundering (AML) rules for cryptocurrency exchanges in July 2021.
After the collapse of Terra’s algorithmic stablecoin in May, which sent shockwaves across the crypto markets, governments have pushed to accelerate crypto monitoring.
Also Read: The Central African States Bank Board Urges The Implementation Of A Uniform Digital Currency
Wallets