Could Taiwan ban users buying crypto with credit cards?
By Carine Lee
06:12, 8 August 2022
Taiwan’s Financial Supervisory Commission (FSC) asked credit card companies to stop facilitating payments for crypto-related merchants with the intent to ban the use of credit cards for crypto purchases.
The FSC sent a letter to Taiwan’s Association of Banks recently, conveying the above as the regulator believes cryptocurrencies are risky and speculative assets, according to a local report.
Taiwan’s own crypto exchange Max MaiCoin trades over $4m USDT in 24 hours, followed by ETH, BTC and Sandbox’s SAND.
USDT to US dollar
The FSC noted instead of facilitating financial investments and speculative trading, credit cards should serve as a payment method for goods and services.
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Latest Taiwan crypto crackdown
Credit card providers who are currently serving crypto merchants have three months to comply with the FSC requirement, according to the report.
After the deadline companies must submit an audit report to the regulator to show compliance.
This is not the first time Taiwan is tough on crypto-related activities, as it warned the general public, just last month, about the risk of non-fungible tokens (NFTs) as an investment.
ETH to US dollar
According to Taiwan's central bank, only 28.5% of investors profit from selling an NFT, and one-third of NFTs produced do not sell at all.
Taiwan’s CBDC experiment
Taiwan’s NFT sector is dominated by ETH, according to the central bank report which said that nearly 80% of NFTs are minted on Ethereum blockchain.
The regulator also emphasized that credit cards are barred as payment tools for online gambling, stocks, futures, options and other transactions it considers high risk.
SAND to US dollar
In June, Taiwan’s central bank announced that it is looking at both a retail and wholesale central bank digital currency.
At the start of July it set out a series of next steps for the country’s CBDC experiment while unclear when the scheme could roll out to the public.
BOJ ends CBDC project
Taiwan's central bank has been working on a pilot for a CBDC for the past two years, according to a report, to allow people to use a digital wallet and make payments without using a debit or credit card.
Taiwan’s move is unusual among East Asia’s economies. While China is moving ahead with its e-yuan retail CBDC the Bank of Japan recently announced it was discontinuing its own project due to a lack of public interest.
Likewise Australia’s central bank sees a ‘weak case’ for a retail CBDC.
Southeast Asia embraces CBDCs
Enthusiasm for the concept is stronger among Southeast and South Asian states.
Thailand is piloting a digital baht and Indonesia is looking to use a retail CBDC to drive benefits into the retail economy.
Vietnam is also looking at the concept while neighboring country Cambodia has had its digital bakong in action since 2020.
Even the tiny Himalayan Kingdom of Bhutan is piloting a retail CBDC with Ripple, the US backers of XRP which is currently locked in a legal tussle with the US Securities and Exchange Commission.
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