Taiwan plans to outlaw using credit cards to buy cryptocurrencies
The financial regulator in Taiwan has imposed new regulations on banks and credit card providers that forbid them from accepting credit cards as payment for services related to virtual assets.
The Financial Supervisory Commission FSC confirmed that a letter was sent earlier this month to Taiwan's banking industry organization prohibiting credit card companies from adding virtual assets service providers as merchants. The regulator reportedly warned of the dangers of virtual assets in the letter and gave credit card companies three months to make the necessary changes and comply with the new specifications.
The statement stated that credit cards should not be utilized as payment methods for virtual asset transactions due to the highly speculative and high-risk nature of virtual assets. According to the authority, credit cards should be used as a means of making purchases instead of obtaining capital for speculative trading and financial investments.
In this case, FSC refers to "highly speculative, high risk, and highly financially leveraged transactions" involving cryptocurrencies. According to the newspaper, the FSC has also outlawed the use of credit cards as payment methods for transactions involving online gambling, stocks, futures, options, and other similar kinds of financial instruments.
Taiwan's achievement in the digital industry :
Taiwan has just stated that it plans to introduce a central bank digital currency (CBDC). After its prototype retail CBDC underwent successful testing in technical simulations last month, plans for a pilot are anticipated soon. A CBDC is being created, but according to Central Bank governor Yang Chin-long, a precise date for its public launch is yet unknown. Yang thinks that before a wider rollout for payments, the banking regulator must clear a few obstacles.
For over two years, the Bank of Taiwan has been looking into the potential applications of both a retail and a wholesale CBDC. The central bank planned to finish the technical testing of the CBDC prototype by September, as per Atlantic Council Research. According to the article, the BoT already finished its feasibility study back in June 2020 while the nation considers the possibilities of digital payments in the future.
Taiwan experienced a surge in activity following China's crackdown on cryptocurrencies in 2021 and was expected to become the new crypto hub for the area.
CBW - External Analyst