Taiwan to Consider Crypto ETFs Based on Global Trends and Regulatory Development

Taiwan’s Financial Supervisory Commission (FSC) is exploring the possibility of introducing cryptocurrency exchange-traded funds (ETFs).

The FSC revealed that it is closely studying foreign cryptocurrency futures products and ETFs. The intention is to gradually ease restrictions in alignment with global market conditions, FSC revealed to local media.

The context of this exploration coincides with several significant global developments. The Federal Reserve’s decision to cut interest rates and the upcoming review by the U.S. Securities and Exchange Commission (SEC) of the Bitcoin spot ETF in January next year have added to the momentum. The anticipation around the Bitcoin halving in April, contributing to a 150% surge this year.

Taiwan Regulators Monitoring Crypto ETF Developments

The FSC recognizes the potential impact of a Bitcoin index stock fund, contingent on SEC approval and subsequent public investment permission. Taiwan’s domestic investment banks, attuned to these advancements, have expressed longstanding interest in introducing similar products.

The FSC draws parallels with global counterparts, pointing out the proliferation of cryptocurrency futures products and ETFs in various markets.

The FSC acknowledged that Canada’s Toronto Stock Exchange, Cboe Australia Exchange, and major U.S. exchanges have listed or are in the process of listing various crypto ETFs.

FSC Looking to Adopt Phased Approach

The FSC emphasized a phased approach based on self-discipline and standards for relaxing regulations around crypto ETFs.

This cautious strategy aligns with Taiwan’s historical prudence, as witnessed in the delay of cryptocurrency ETFs and blockchain ETFs due to concerns over volatility and speculative nature.

As Taiwan contemplates this significant stride into the cryptocurrency ETF domain, industry players are cautiously optimistic. While some considered private placements for overseas cryptocurrency ETFs, challenges such as tightened regulatory supervision and concerns over errors and price lags led to reconsideration.

Taiwan’s regulator further noted that they may plan something like “cryptocurrency concept ETFs,” which could potentially invest in cryptocurrency-related software and hardware vendors, providing investors with exposure to the industry without direct linkage to cryptocurrency price fluctuations.