Taiwan to Ban Credit Cards for Use in Purchase of Cryptocurrencies

Taiwan is cracking down on the use of credit and debit cards for the use in buying digital currencies in a bid to protect consumers.

According to a report by a local news platform, UDN, the Financial Supervisory Commission (FSC) sent a letter to the Association of Banks with instructions not to process transactions involving digital currencies.

Specifically, the regulator does not want Banks to grant Virtual Assets Service Providers (VASPs) the status of merchants which will qualify them to transact using credit or debit cards.

The FSC reportedly posited that the instability and speculation that is attached to the digital currency ecosystem is more closely linked to industries such as gambling, stocks, futures, options, and other related transactions. The FSC noted that exceptions cannot be made for digital currencies when transactions involved in these risky endeavors are generally not permitted.

The regulator also maintained that the fact that the transactions linked to the crypto ecosystem is speculative makes it very difficult for them to be tracked, thus predisposing them to money laundering. 

The FSC is giving banks whose system is not aligned to heed the directives a span of three months to adjust to the new guidelines.

Crypto Crackdown in Various Forms

The move by Taiwan to crack down on digital currencies through a ban on credit card transactions is one of the many models that is being employed by various governments around the world. 

The People’s Bank of China (PBoC), the apex monetary authority in China proscribed all financial transactions bothering digital currencies last year, a move that has stumped activities involving these nascent asset classes on Chinese shores.

The ban on crypto trading activities turned the crypto ecosystem in China into a Ghost town as many digital currency exchanges moved out of the country. With Taiwan trailing this part, it is unclear what the future might hold for the Web3.0 ecosystem in the country seeing the government is now very persistent in its warnings against crypto use on its shores.