Credit cards should not be used for crypto transactions, Taiwan’s financial watchdog says – Regulation Bitcoin News

The Financial Supervisory Authority of Taiwan has asked local banks not to allow the use of cards for payments in transactions involving cryptocurrencies, local media revealed. The authority says these assets are risky while associated cash flows are difficult to monitor.

Taiwanese regulator urges banks not to allow crypto-related payments with bank cards

Taiwan’s Financial Supervisory Commission (FSC) has asked credit card issuers and banks to effectively prevent their customers from using credit cards as a payment instrument in transactions related to cryptocurrencies, according to a report published by business news portal UDN.

The watchdog cites the recent downturn in the crypto market as well as persistent concerns about money laundering risks associated with the virtual assets, which it also describes as highly speculative and extremely volatile.

Sources in the financial industry claim that the FSC issued the call in a letter to the Bankers Association of Taiwan earlier in July. This week, the authority has neither rejected the news nor commented initially. It later confirmed to Forkast that it had asked credit card agencies not to sign up crypto service providers as merchants.

Insisting that credit cards should serve as a payment tool for consumption rather than a method of financial investment and speculative trading, the commission gave card acquirers three months to comply with the new rules. The FSC also reminded people of a previous requirement that prohibits the use of credit cards in payments for transactions related to shares, futures and options.

Taiwan’s crypto sector remains largely unregulated, despite the adoption of updated anti-money laundering (AML) rules for service providers in the market last summer. The country has yet to complete a project to issue a central bank digital currency (CBDC).

In June, Taiwan’s central bank completed a series of technical simulations in a closed-loop environment as part of ongoing trials of the retail digital currency prototype. However, the governor of the monetary authority admitted that the bank may need another two years to complete work on the CBDC, twice as long as expected.

Do you expect Taiwan to impose other restrictions on crypto-related transactions in the future? Let us know in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’ quote: “To be a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.