The Financial Supervisory Commission (FSC) of Taiwan is cautiously exploring the possibility of allowing crypto exchange-traded funds (ETFs) within the country. While in the preliminary stages, the FSC is closely observing global developments in other markets to inform its decision-making process.
As reported on December 5 by the Taiwanese newspaper Commercial Times, the FSC is particularly monitoring the United States, where the Securities and Exchange Commission is set to review spot Bitcoin ETFs in January. Additionally, the FSC is keeping a close eye on crypto ETF activities in Canada and Australia, where local exchanges have embraced these investment products.
Acknowledging the launch of numerous cryptocurrency futures commodities on major global exchanges, including the Toronto Stock Exchange, New York Stock Exchange, Nasdaq Exchange, Chicago Board Options Exchange, and Hong Kong Stock Exchange, the FSC is gauging the broader landscape of crypto financial instruments.
While expressing the intention to gradually ease rules for digital asset trading, the FSC emphasizes the importance of a balance between liberalization and maintaining self-discipline and regulation. Reportedly, local regulators in Taiwan have previously hindered crypto ETF initiatives by domestic investment banks due to concerns about the high volatility associated with cryptocurrencies.
Taiwan has witnessed an acceleration in crypto regulatory developments. In October, local legislators introduced the Virtual Asset Management Bill, outlining regulatory requirements for the industry. The bill proposes practical obligations for virtual asset service providers, such as segregating customer funds from the company’s reserve funds. Notably, it does not mandate stablecoin issuers to maintain a 1:1 ratio of reserve funds and does not prohibit algorithmic stablecoins.
In September, the FSC issued industry guidelines for virtual asset service providers, prohibiting foreign non-licensed entities. Major local crypto exchanges responded by forming a self-regulatory association to align with regulatory expectations. The evolving regulatory landscape in Taiwan underscores the authorities’ commitment to strike a balance between fostering innovation and ensuring a secure environment for crypto-related activities.
