In a significant move by Taiwan's Financial Supervisory Commission (FSC), foreign cryptocurrency Exchange-traded funds (ETFs) have been greenlit for access by professional investors. This decision, made on September 30, opens up a new avenue for institutional and high-net-worth individuals to invest in foreign Crypto Assets while adhering to strict regulatory guidelines.
The Limitation to Professional Investors
According to the FSC's latest policy, foreign crypto ETFs are exclusively accessible to professional investors, including institutional investors, high-net-worth individuals, and individuals with recognized financial expertise. Local brokers and securities firms are required to conduct thorough assessments to ensure their clients possess the necessary knowledge and expertise before investing in these ETFs.
The FSC's enforcement includes thorough assessments by local brokers and securities firms to verify clients' financial expertise before granting access to these crypto investment products. The ongoing commitment to monitoring the Policies' implementation ensures effective risk management.
Taiwan joins other financial hubs like Hong Kong and Singapore in acknowledging the increasing demand for Digital asset Investments while maintaining a vigilant stance due to risks such as Market volatility, fraud, and money laundering. Taiwan has historically maintained strict regulations on Digital assets due to concerns about Market instability and financial crime.
In line with its regulatory approach, Taiwan has taken significant steps to enforce Anti-Money Laundering (AML) measures, particularly focusing on cryptocurrency Exchanges. In July, the government tightened AML regulations for Virtual asset service providers, imposing fines of up to NT$5 million or up to two years in prison for non-compliance.
Earlier in the year, FSC Chairman Huang Tianzhu cautioned investors about fraudulent activities related to cryptocurrencies, emphasizing the lack of correlation between Digital assets and the real Economy. This cautious approach underscores Taiwan's commitment to safeguarding investors and ensuring regulatory compliance.
Taiwan's Stance on CBDC Launch Despite crypto ETF Approval
While Taiwan is gradually permitting foreign crypto ETFs, there is hesitation regarding the rollout of a central bank Digital currency (CBDC). Yang Chin-long, the president of the Central Bank of the Republic of China, stated that Taiwan is taking a cautious approach to launching a CBDC, reflecting the government's careful stance on Digital currency Development.
Taiwan has made progress in exploring a CBDC Protocol for retail transactions and has conducted experiments with a proof-of-concept for wholesale Digital currencies. Similar to the approach with crypto ETFs, Taiwan's central bank is proceeding cautiously to ensure that any Digital currency aligns with the broader policy framework.
