Credit cards shouldn’t be used for crypto transactions, says Taiwan’s financial watchdog CryptoGlobe
Taiwan’s financial regulator has instructed local banks not to allow the use of cards for payments in transactions involving cryptocurrencies, local media have revealed. The authority says these assets are risky while the associated cash flows are difficult to monitor.
Taiwan regulator urges banks not to allow crypto-related payments with bank cards
Taiwan Financial Supervisory Commission (FSC) called on credit card issuers and banks to effectively prevent their customers from using credit cards as a payment instrument in cryptocurrency-related transactions, according to a report published by business news portal UDN.
The watchdog cites the latest downturn in the crypto market as well as ongoing concerns about money laundering risks associated with virtual assets, which it also describes as highly speculative and extremely volatile.
Financial industry sources say the FSC made the call in a letter to the Taiwan Bankers Association earlier in July. This week, the authority neither denied the news nor initially commented. He later confirmed to Forkast that he instructed credit card agencies not to sign crypto service providers as merchants.
The commission insisted that credit cards should be used as a payment tool for consumption rather than a method of financial investment and speculative trading and gave card acquirers three months to comply with the new rules. The FSC also reminded people of a prior requirement that prohibits the use of credit cards in payments for transactions related to stocks, 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 finalize a plan 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 for the prototype retail digital currency. The governor of the monetary authority, however, admitted that the bank may need two more years to complete the work of the CBDC, twice as long as expected.
Do you expect Taiwan to impose further restrictions on crypto-related transactions in the future? Let us know in the comments section below.
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