This decision comes amid rising demand for spot Bitcoin ETFs and a cautious shift in China’s cryptocurrency policies.
Professional investors will soon be able to participate in cryptocurrency exchange-traded funds (ETFs), including Bitcoin ETFs, through a re-entrustment process, according to the Financial Supervisory Commission (FSC), Taiwan’s most prominent financial securities regulator.
In light of the growing demand for spot Bitcoin exchange-traded funds (ETFs) in the market, this new development comes at a time when Chinese policymakers are proposing a cautious shift in the cryptocurrency market.
Taiwan FSC Open the Gates for Bitcoin ETFs
The Taiwan Financial Services Commission (TFSC) announced in its most recent release that it has started talks with the Securities Business Association of the Republic of China (SBA) to look into the investment risks associated with international cryptocurrency exchange-traded funds (ETFs).
The objective of enhancing China’s re-entrustment business for securities firms and offering investors a wide range of product options guided the decision. Because of this, the Financial Stability Council (FSC) suggests that professional investors invest in these high-risk exchange-traded funds (ETFs) through re-entrustment.
This new development has occurred approximately two months after Taiwan Mobile received a license to operate as the virtual assets service provider (VASP) in the country. Retail investors in Taiwan will not initially have access to cryptocurrency exchange-traded funds (ETFs).
Only professional investors, such as institutional investors, high-net-worth legal entities, and individual investors who have considerable asset portfolios and necessary investment skills, are able to acquire exposure to the opportunity.When it comes to gaining exposure to Bitcoin ETF, securities firms in the country must first obtain approval from their boards of directors.
Before they can facilitate the client’s initial investment, they must first assess the client’s level of familiarity and competence with virtual assets.According to the Taiwan Financial Services Commission (TFSC), clients would be required to sign a risk warning letter prior to making their initial purchase of the cryptocurrency exchange-traded fund (ETF).
In a similar vein, securities firms are required to give comprehensive product information regarding the exchange-traded fund (ETF) for any purchases made by clients who are not institutions. Furthermore, as part of Taiwan’s crypto legislation, frequent education on virtual assets and related items will be required.
In a statement, the Taiwan Financial Supervisory Commission (TFSC) stated that it would continue to tighten laws and monitor the execution of these measures in order to protect investors while simultaneously strengthening the competitive edge of securities firms.
Last week, the spot Bitcoin ETF continued to be in high demand, bringing in more than one billion dollars in new money in the United States. When it comes to investing in this asset class, other markets, such as Hong Kong and Australia, have also introduced this investment product, which provides investors with a regulated environment in which to do so.
Despite the prohibition on trading, Chinese investors are seeking refuge in Bitcoin amid the precarious state of the Chinese economy. In his speech at the 2024 Tsinghua Wudaokou Chief Economists Forum, which took place in Beijing last week, the former Chinese finance minister Lou Jiwei urged attendees to pay particular attention to the developments that have taken place in the cryptocurrency industry.
In the midst of the increasing demand for Bitcoin exchange-traded funds (ETFs) in the United States, Lou issued a warning about the potentially detrimental effects that cryptocurrency can have on the stability of the global financial system.
