Taiwan’s Financial Supervisory Commission (FSC) has officially allowed professional investors to trade “foreign virtual asset” exchange-traded funds (ETFs).
In an announcement on Sept. 30, the FSC stated that the purpose of this move is to expand “product choices” and “open investment channels for professional investors” in order to enhance Taiwan’s financial market competitiveness.
The commission mentioned that it will continue to monitor the virtual asset market and emphasize risk management and regulatory compliance.
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Cautious approach to digital assets
Taiwan has traditionally taken a conservative stance on digital assets such as cryptocurrencies, citing concerns about risks like fraud and volatility.
The FSC has issued warnings and implemented strict Anti-Money Laundering measures, especially targeting cryptocurrency exchanges.
The Taiwanese government has backed initiatives like the 2018 FinTech Regulatory Sandbox, which allows startups and institutions to test new business models without requiring full regulatory compliance.
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Market implications for Taiwan
Taiwan’s regulatory shift towards supporting digital asset ETFs is in line with similar policies in global financial centers like Hong Kong and Singapore.
By restricting access to these high-risk investments to professional investors, Taiwan aims to balance exposure to digital assets with risk mitigation.
Digital asset ETFs are categorized as “high-risk investments” in Taiwan, and companies looking to deal with them must adhere to FSC rules for professional investors.
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No rush for the CBDC launch
Despite Taiwan’s acceptance of digital asset ETFs, its central bank has been 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 that there is no hurry to introduce a CBDC, preferring gradual progress over 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 objectives.
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