Taiwan’s Financial Supervisory Commission (FSC) has officially permitted professional investors to engage with “foreign virtual asset” exchange-traded funds (ETFs).
In a Sept. 30 announcement, the FSC said the move aims to broaden “product choices” and “open investment channels for professional investors,” to improve Taiwan’s financial market competitiveness.
The commission noted it would continue monitoring the virtual asset market and emphasized a focus on risk management and regulatory compliance.
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Cautious approach to digital assets
Taiwan has traditionally maintained a conservative stance on digital assets like cryptocurrencies, citing concerns over risks such as fraud and volatility.
The FSC has issued warnings and implemented strict Anti-Money Laundering measures, particularly targeting cryptocurrency exchanges.
The Taiwanese government has supported initiatives like the 2018 FinTech Regulatory Sandbox, which allows startups and institutions to test new business models without needing full regulatory compliance.
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Market implications for Taiwan
Taiwan’s regulatory shift toward supporting digital asset ETFs aligns with similar policies in global financial centers, including Hong Kong and Singapore.
By limiting access to these high-risk investments to professional investors, Taiwan aims to balance exposure to digital assets with risk mitigation.
Digital asset ETFs are classified as “high-risk investments” in Taiwan, and firms wishing to handle them must comply with FSC rules regarding professional investors.
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No rush for the CBDC launch
Although Taiwan is starting to embrace digital asset ETFs, its central bank has remained cautious about launching a central bank digital currency (CBDC).
Yang Chin-long, the president of the Central Bank of the Republic of China, previously stated there was no rush to introduce a CBDC, favoring gradual progress rather than competing with other nations.
While Taiwan has developed a CBDC protocol for retail payments and is exploring a proof-of-concept for wholesale CBDCs, the central bank’s approach remains aligned with the government’s broader digital policy goals.
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