Taiwan Restricts the Use of Credit Cards to Purchase Cryptocurrency
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- Taiwan is preparing to prohibit all bank purchases of cryptocurrencies made with credit cards.
- Taiwan’s Financial Supervisory Commission (FSC) has continuously enacted new legislation to regulate cryptocurrency exchange operations.
- Taiwan quickly became the center of cryptocurrency activity following China’s complete ban on cryptocurrencies last year.
The global cryptocurrency market traded slightly bearish amid series of negative fundamentals in the market. One of these came from Taiwan. A notice from Taiwan’s leading financial regulator, the Financial Supervisory Commission (FSC), informed the banking sector. The notice cautions against providing virtual asset providers (VASPs) with information about merchant status in credit card transactions.
Taiwan Prepares to Prohibit Crypto Purchases
In other words, Taiwan is preparing to prohibit all bank purchases of cryptocurrencies made with credit cards. However, this could be bad news for cryptocurrency users. This occurred when the Financial Supervisory Commission (FSC) sent a letter to the banks’ association warning them about the risks of dealing with digital assets.
In addition, the regulator requests that banks (credit card departments) refrain from adding cryptocurrency platforms as merchants. The Financial Supervisory Commission (FSC) also stated that using credit cards to purchase stocks, futures, or other assets in Taiwan would be illegal. Meanwhile, Taiwan’s financial regulator has warned banks (credit card companies) that they only have three months to comply with the new rules.
Financial Supervisory Commission to Enact New Regulation
Taiwan’s Financial Supervisory Commission (FSC) has continuously enacted new legislation to regulate cryptocurrency exchange operations. As a result, we can anticipate more new legislation in the future. It should be noted that the nation issued the first rule for the cryptocurrency industry in July 2021 to combat money laundering. However, this situation arose due to authorities’ hasty adoption of crypto regulations after a significant decline in the crypto market.
It is worth noting that Taiwan quickly became the center of cryptocurrency activity following China’s complete ban on cryptocurrencies last year. As a result, Taiwan has become one of the most rapidly growing crypto hubs. The most recent market crash destroyed the flow, prompting regulators to reconsider the sector.
Central Bank Working on Developing a Retail Payment System
Taiwan’s central bank has been working on digital currency for growth and a good payment system. This is evident since Taiwan’s central bank began testing its digital currency. A test is reportedly a technical simulation of the digital money before the financial authority announces the final release. In September 2020, Taiwan began investigating and testing a retail CBDC prototype.
Taiwan’s central bank governor, Chinlone Yang, stated that the country is working on developing a retail payment system. This was confirmed by Taiwan’s central bank governor, Chinlone Yang, who stated that the five Taiwanese banks had collaborated with the central bank to develop a successful retail payment system.
The central bank, however, is unsure about the CBDC release dates because they are debating whether to formally introduce the CBDC until it has sufficiently informed the public about its use. The financial watchdog also intends to create the necessary laws and legal framework to support them.
