On September 30, Taiwan’s Financial Supervisory Commission (FSC) officially approved the availability of foreign cryptocurrency exchange-traded funds (ETFs) for professional investors. This marks a significant step in the country’s growing embrace of digital assets, allowing institutional investors and high-net-worth individuals to invest in foreign crypto products while complying with Taiwan’s strict regulatory guidelines.
Taiwan FSC Limits Crypto ETFs to Professional Investors
The FSC’s policy restricts foreign crypto ETFs to professional investors, including institutions, high-net-worth individuals, and those with proven financial expertise. This ensures that only those with the necessary experience and knowledge can access these high-risk digital assets.
The regulator requires local brokers and securities firms to conduct thorough assessments of clients’ financial expertise before granting them access to these crypto investment products. This move underscores the FSC’s focus on investor protection and risk management as the country cautiously expands into the digital asset space.
Taiwan’s Cautious Approach to Crypto
Taiwan’s decision to allow foreign crypto ETFs for professionals aligns it with other financial hubs such as Hong Kong and Singapore, which have recognized growing institutional demand for digital assets. However, Taiwan maintains a cautious stance due to concerns over market volatility, fraud, and money laundering.
Reflecting this cautious approach, Taiwan has enforced strict Anti-Money Laundering (AML) regulations. In July, the government tightened its AML measures for virtual asset service providers (VASPs), with non-compliance penalties reaching up to NT$5 million ($153,817) or two years of imprisonment.
FSC Chairman Huang Tianzhu has previously warned about fraudulent activities involving digital assets, stating that cryptocurrencies have “no correlation to the real economy” and advising caution against unregulated overseas investments.
Taiwan’s Hesitation Over CBDC Despite ETF Approval
While Taiwan is making progress in opening its market to foreign crypto ETFs, the country remains hesitant about launching a central bank digital currency (CBDC). Yang Chin-long, president of Taiwan’s Central Bank, emphasized that Taiwan is adopting a gradual approach to CBDC development to ensure alignment with the country’s broader financial policies.
The government has explored a CBDC protocol for retail transactions and tested a proof-of-concept for wholesale digital currencies. However, as with crypto ETFs, Taiwan’s central bank is moving carefully to balance innovation with regulatory compliance and risk management.
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