Taiwan’s regulator has authorized trading in shares of foreign cryptocurrency-based ETFs

Only professional investors can access exchange-traded funds of digital assets

30.09.2024 - 14:30

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Last updated on Nov 16, 2024

What’s new? Taiwan’s Financial Supervisory Commission (FSC) has officially authorized professional investors to trade shares of cryptocurrency-based overseas exchange-traded funds (ETFs). According to a press release, the move will expand product choices and open up new investment channels, which will enhance the competitiveness of the local financial market.

Press release

What else is known? Officials noted that they continue to monitor the crypto market and reminded industry companies of the importance of risk management and regulatory compliance.

Taiwan has generally taken a conservative stance on digital assets, citing concerns about fraud and volatility. The FSC has previously issued warnings and implemented strict anti-money laundering measures affecting crypto exchanges among others.

At the same time, back in 2018, the government supported an initiative to launch a regulatory sandbox for fintech startups. Such experimental legal regimes or special economic zones allow companies to test new business models under more lenient regulation.

The FSC’s decision to support crypto-ETFs is in line with similar policies in global financial centers, including the United States and Hong Kong. In April, for example, Hong Kong’s regulator allowed local companies to launch their own bitcoin and Ethereum-based spot ETFs. In the US, spot BTC-ETFs were launched in January, while Ethereum funds appeared only in July. The segment leader is the largest investment company BlackRock with IBIT and ETHA funds.

In turn, Taiwan restricts access to such products for retail investors in an effort to reduce risks. The country categorizes crypto-ETFs as high-risk investments and issuers must comply with FSC rules for professional investors.

Taiwanese exchange BitoPro will launch a bank account with support for cryptocurrencies

Private Far Eastern International Bank has become a partner of the initiative

In June, Tether launched blockchain courses for Taiwanese students. The company is one of the largest in the industry, it issues a centralized USDT stablecoin with a capitalization of over $118 billion.

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