Taiwan's Financial Watchdog Bans Use Of Credit Cards For Crypto Purchases

The Financial Supervisory Commission (FSC) of Taiwan has banned the use of credit cards for cryptocurrency transactions on the island nation.

According to a letter issued by the financial watchdog to the banking industry association, banks have been directed to not grant the “merchant status” to virtual asset providers serving credit card holders.

Credit card companies given 3 months to comply

Strict anti-money laundering laws were enacted for cryptocurrency services providers last July, the financial regulator, warning against the risks associated with the use of cryptocurrencies, has given credit card companies three months to comply with the norms.

According to reports, the FSC has also mandated that credit cards cannot be used for online gambling, stocks, futures, options, and other transactions.

Crypto activities in Taiwan quietened since last year

Following the suggestion of the Financial Action Task Force, Taiwan, in July 2021, revised its Anti-Money Laundering (AML) standards for cryptocurrency exchanges.

The island nation, which witnessed a surge in crypto activities after China cracked a whip on cryptocurrencies, has since gone quiet on the sector.

Also Read: Crypto Users Will Reach 1 Billion In Less Than 10 Years: Study

Regulators globally tighten crypto regulations

Regulators globally have accelerated cryptocurrency laws in recent months, following the rapid slump in the markets after reaching all-time highs in November last year.

Concerns over the fate of retail investors after the collapse of Terra’s algorithmic stablecoin in May, which sent shockwaves throughout the broader crypto markets, and liquidations of prominent crypto firms that caused billions of dollars to exit the industry have exacerbated government efforts to impose regulations on the sector.