Taiwan is stepping up its game in the digital finance world.
The Financial Supervisory Commission (FSC) has officially allowed professional investors to tap into “foreign virtual asset” exchange-traded funds (ETFs), marking a significant shift in the country’s approach to digital investments.
In its September 30 announcement, the FSC emphasized that this move aims to expand investment options for professionals and boost Taiwan’s financial market competitiveness.
The commission also stressed its commitment to closely monitoring the virtual asset market, with a sharp focus on maintaining regulatory compliance and robust risk management.
Taiwan has historically taken a cautious approach to digital assets, especially cryptocurrencies, due to concerns about fraud and volatility.
The FSC has implemented stringent Anti-Money Laundering regulations, with particular scrutiny on cryptocurrency exchanges. In line with these precautions, Taiwan launched the 2018 FinTech Regulatory Sandbox, encouraging startups and financial institutions to test innovative models under controlled conditions.
This shift toward supporting digital asset ETFs mirrors policies seen in global financial hubs like Hong Kong and Singapore.
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By limiting access to professional investors, Taiwan is carefully balancing the promise of digital assets with the need for risk mitigation. These ETFs are classified as high-risk, and firms handling them must strictly adhere to FSC rules concerning professional investors.
While Taiwan is embracing digital asset ETFs, its central bank is still cautious about launching a central bank digital currency (CBDC).
Yang Chin-long, head of Taiwan’s Central Bank, has indicated that the nation prefers a slow and steady approach, focusing on gradual progress rather than racing against other countries.
Although a CBDC protocol for retail payments exists, and a wholesale CBDC proof-of-concept is in the works, the bank’s careful strategy reflects Taiwan’s broader digital policy goals.
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Taiwan’s measured steps in the digital finance world signal a blend of innovation and prudence—opening new doors for professional investors while keeping a close eye on risk.
