The Financial Supervisory Commission (FSC) in Taiwan has said that cryptocurrencies are risky assets mainly used for speculation. Therefore, the regulator wants to ban using credit cards to buy cryptocurrencies.
Taiwan to ban crypto use in buying cryptocurrencies
Reports have now said that the FSC sent a letter to the Association of Banks in Taiwan at the beginning of the month. The association requested credit card companies halt processing payments to merchants offering cryptocurrency services.
The regulator added that credit card providers must stop processing payments for different financial assets, including stocks, futures, options, online gambling, and high-risk transactions.
The FSC added that credit cards should only be used as a payment method for goods and services. According to the regulator, these cards should not be used to support financial investments and speculative cryptocurrency trading.
Your capital is at risk.
The reports have also added that credit card companies that process payments to cryptocurrency merchants will have three months to comply with the requirement made by the FSC. After the three-month deadline lapses, these companies must publish an audit report showing their compliance.
This is not the first time Taiwan has warned citizens about crypto investments. in April last year, the country warned against investing in Bitcoin and other cryptocurrencies, saying that these assets were “highly speculative.”
The Taiwan government has also adopted anti-money laundering laws that should be followed by all digital asset providers within the country. Local exchanges are mandated to report transactions exceeding $17,900. Exchange users should also complete a mandatory KYC verification when setting up an account.
The Taiwan central bank has also warned about non-fungible tokens (NFTs). The institution said that there were many fake transactions within the NFT market, and users needed to refrain from participating in the market.
Taiwan plans to release a CBDC
Taiwan is close to launching its central bank digital currency (CBDC). In June, the country announced it had been developing a CBDC over the past two years and has completed the trials for retail use.
The bank has not disclosed when the CBDC will be launched. However, it has pinpointed the benefits of this digital currency, saying that it will allow citizens to make payments easily and conveniently.
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Source: https://insidebitcoins.com/news/taiwan-prohibits-the-use-of-credit-cards-in-crypto-purchases