Taiwan Closes the Possibility of Buying Crypto With Credit Cards

The Taiwan Financial Supervisory Commission (FSC), the country’s top financial regulator, issued a note to the banking industry stating that they should not grant seller status to virtual asset providers (VASPs) in transactions with credit card holders. In other words, buying cryptocurrencies with credit cards will not be possible.

According to local media, FSC sent a letter to the Association of Bankers in early July reminding them that virtual assets are highly speculative and risky.

The regulator also pointed out that credit cards are consumer instruments for making payments, and not for investment transactions and asset management or high-risk payment instruments.

In its letter, the FSC even compared crypto investing to online gambling or buying stocks, futures and options.

FSC requires banks to adjust to the new rules within 3 months. After that, the audit unit must check its internal compliance and report the results to the regulator.

In 2021, the regulator issued several press releases to remind the public of the associated risks associated with virtual assets.

In July 2021, Taiwan introduced updated anti-money laundering (AML) requirements for cryptocurrency exchanges based on the recommendation of the Financial Action Task Force on Money Laundering.

At the end of June this year, the governor of the Central Bank of the Republic of China (Taiwan) recommended an interest-free design for a central bank digital currency (CBDC) pilot project. Taiwan is currently in the second phase of its CBDC pilot program, in which its central bank provides CBDC to five selected Taiwanese banks for distribution to consumers.

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