Zinger Key Points
- Taiwan's approach to virtual asset management prioritizes self-regulation and gradual liberalization.
- Future public funds in Taiwan may focus on "cryptocurrency concept ETFs," investing in related tech sectors.
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Taiwan is cautiously approaching the introduction of cryptocurrency exchange traded funds (ETFs), with the Financial Supervisory Commission (FSC) indicating a need to closely monitor global trends in the crypto market.
What Happened: The FSC has noted the significant price volatility in cryptocurrencies and virtual currencies, noting that many countries are still in the process of exploring appropriate regulatory frameworks.
The commission plans to thoroughly research and analyze the development of foreign cryptocurrency futures products and ETFs before considering any relaxation of regulations based on market conditions.
The FSC emphasizes that the management of virtual assets in Taiwan will initially rely on self-regulation and standards, with gradual liberalization to follow.
Why It Matters: The anticipation of the Federal Reserve's interest rate cuts and the U.S. Securities and Exchange Commission's (SEC) upcoming review of the Bitcoin BTC/USD spot ETF in January, along with Bitcoin's production reduction scheduled for April, have contributed to a significant surge in Bitcoin's value this year, exceeding 145%.
The Bitcoin index stock fund, which tracks Bitcoin's price, could see a historic rise if the SEC approves it for public investment next year.
This prospect has sparked considerable interest among domestic investment banks in Taiwan to introduce similar financial products.
Internationally, a variety of cryptocurrency futures products have been launched.
The Chicago Mercantile Exchange has introduced five futures and four futures options, while the Intercontinental Exchange has rolled out two futures and one futures option.
ETFs have also seen significant growth, with Canada's Toronto Stock Exchange listing 16 spot ETFs and three futures ETFs, Cboe Australia Exchange listing two spot ETFs, and the New York Stock Exchange, Nasdaq Exchange, and Cboe listing a total of eight futures ETFs.
Additionally, the Hong Kong Exchange has listed three futures ETFs.
What's Next: Some industry players had considered connecting to overseas cryptocurrency ETFs through private placements.
Concerns included the possibility of extended regulatory review times and issues such as tracking errors, price lags, and poor liquidity in cryptocurrency ETFs, which often experience disproportionate declines and rises.
Looking ahead, public funds in Taiwan may explore "cryptocurrency concept ETFs," focusing on investments in companies related to cryptocurrency software and hardware, rather than directly linking to cryptocurrency prices.
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