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Taiwan Looks to Ban Purchasing Crypto Using Credit Cards

Taiwan is planning to prohibit buying cryptocurrencies with credit cards. Local media outlet Economic Daily reported on July 21, noting that the Financial Supervisory Commission (FSC) is behind these efforts. Reportedly, the regulator sent the Taiwan Association of Banks a letter earlier this month, warning the body about the speculative and risky nature of cryptos.

According to the FSC letter, the cash flow in crypto is complex because it is difficult to monitor transactions. To this end, the regulator asked banks to prevent credit card holders from using their cards to purchase virtual assets. Additionally, the FSC requested banks to refrain from signing on crypto service providers as merchants.

Explaining why it is pushing for this restriction, the watchdog said credit cards are consumer payment tools. The FSC added that people should not use credit cards as a tool for financial investments or speculative trading.

The regulator built its case on the fact that Taiwan does not allow citizens to use credit cards to pay for online gambling, stocks, futures, options, and other similar transactions.

Taiwan is Working on a CBDC

This news comes after Taiwan stood a chance to become East Asia’s crypto hub after China enforced a blanket ban on crypto last year. However, the country introduced strict anti-money laundering (AML) rules on July 1, 2021, nipping this possibility in the bud.

Among the requirements of the AML rules is to report transactions exceeding $18,000 to the bureau of investigation (FIU). Not all Taiwanese exchanges could meet these requirements, and at least three shut down operations.

Meanwhile, the Central Bank of the Republic of China (Taiwan) is actively pursuing its central bank digital currency (CBDC) ambitions. In June, the authority announced that it had completed the second phase of trialing its CBDC.

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According to the central bank’s Governor, Yang Chin-Long, five commercial lenders took part in this trial. However, Yang believes CBRC could take up to two years to create a prototype CBDC.

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