No Buying Crypto With Credit Cards: These Are Disallowed Purchases

As global regulatory pressure mounts on various stakeholders in the crypto industry, not everything can be ascertained. In the past, central banks placed restrictions on banks over deposit of fiat currency in crypto exchanges by individuals. The regulatory landscape has now reached various instruments in the financial payments space.

Taiwan To Cut Down Credit Card Purchases

In a latest, authorities of an Asian country is introducing restrictions on crypto purchases using credit cards. The move effectively means barring credit card agencies from signing crypto platforms as merchants. Hence, buying crypto with credit card will not be allowed. The credit card issuers will have around three months to make changes in compliance with the new rules.

According to reports from Taiwan, the country’s Financial Supervisory Commission informed banks about the risky nature of crypto assets. In a letter, the commission said that the the cash flow involving crypto is complex and that it would be difficult to effectively monitor transactions.

“Credit card acquirers are required to pay attention and should not use virtual assets. In view of the highly speculative and high-risk nature of virtual assets, credit cards should not be used as payment tools for virtual asset transactions.”

Over the years, the Taiwanese authorities stressed on the fact that credit cards are not authorized to be used for crypto payments. These payments are categorized among the likes of online gambling, stocks, futures, options and other transactions, the report added.

Restrictions On Buying Crypto With Credit Card

The commission said that credit card holders must not transact with virtual asset service providers. It also requires that any violations in this regard would be adjusted before an internal compliance review.

In sharp contrast, crypto lenders have in the past partnered with Mastercard for offering crypto backed credit cards. The initiative provided for considering the user’s crypto asset holdings as collateral before issuing the credit card.

Anvesh reports major developments around crypto adoption and price analysis. Having been associated with the industry since 2016, Anvesh is a strong advocate of decentralized technologies. Follow Anvesh on Twitter at @AnveshReddyBTC and reach him out at [email protected]

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.