Taiwan's Regulators Considering Allowing Convenience Stores to Facilitate Crypto to Cash Transactions

  • Cryptocurrency to cash transactions might be approved in Taiwan, according to regulators.
  • Taiwanese lawmakers are evaluating the risks associated with such services and will submit update crypto regulations next month.

Taiwan’s financial regulator, the Financial Supervisory Commission (FSC), is reportedly considering to allow convenience stores in the country to conduct cash transactions involving cryptocurrencies.

FSC chairman, Wellington Koo, recommended on Thursday that digital currency-related cash transactions be allowed “under daily limits.” Local crypto firms have advised that the maximum daily limit be “set at NT $100,000 (3,260 USD) to NT $20,000 (652 USD).”

Daily Limits On Cash Transactions

According to Koo, cash transactions with cryptocurrencies seldom “exceed NT $10,000”, or $350. However, before possibly permitting local merchants to facilitate crypto-to-fiat transactions, the commission is looking for ways to effectively monitor them in order to prevent their use in illicit activities.

As many regulatory authorities have warned, Koo cited concerns about the the use of pseudonymous cryptocurrencies in money laundering. In order to help prevent illicit activities carried out using digital currencies, the FSC instructed Taiwanese (officially the Republic of China) financial institutions in July to open bank accounts for crypto traders.

This requirement would then make it compulsory for local crypto investors to disclose their real name and other information related to AML/KYC checks. Koo said most crypto-related businesses in Taiwan have been supportive and are ready to comply with regulatory policies and requirements to prevent unlawful activities.

According to the Taipei Times, the FSC recently requested the Bankers Association of the Republic of China, a consortium of 62 commercial banks and financial holding companies, to formulate self-regulatory processes and “risk-control measures” for crypto assets.

Cryptocurrencies Will "Not Retain Value"

Sherri Chuang, the deputy director-general of Taiwan’s Banking Bureau, said that updated cryptocurrency regulations would be drafted and put in place next month. Chuang also recommended that local digital asset trading desks work closely with banks.

She noted that if a crypto transaction exceeds a daily limit of NT $100,000, then the company facilitating the exchange must refund the extra amount.

In August, CryptoGlobe reported that Taiwan’s central bank governor, Yang Chin-long, said cryptocurrencies do not have the “trust element” that fiat currencies have and they might collapse.

Ching-long explained that if a currency lacks the trust element, then it will not be able to retain value and cannot function effectively as a medium of exchange - a view shared by giant Wall Street investment bank Goldman Sachs.

Zuckerberg Says Libra Can Boost Facebook's Ad Revenue, China Sees It as a Much Bigger Deal

Facebook CEO Mark Zuckerberg has, during a shareholder meeting, explained how the Libra cryptocurrency project will help the social media giant make money. China, on the other hand, published a book addressing the challenges Libra poses, arguing it could become the future of world currency.

In a transcript posted by Thomson Reuters, we can read Zuckerberg replied to a question asked by a shareholder on how Facebook will be making money off of the Libra cryptocurrency project. Zuckerberg responded by going into Libra’s potential impact on e-commerce on Facebook, and its potential impact on advertising revenue.

According to the social media giant’s CEO, Facebook does not charge a set price for ads and instead works with a bidding system, where every business trying to advertise will bid to compete for ad space. The system, Zuckerberg said, allows them to get the “lowest possible price.”

He added that combining ads with an effective payment tool such as Libra can benefit businesses further as it could make commerce more efficient:

If we can make commerce be more effective for businesses if when they run an ad, somebody who clicks on that ad is now going to be more likely to buy something because they actually have a form of payment that works that’s on file.

Advertising on Facebook, as such, becomes more worthwhile for businesses, which could in turn see them bid higher on ads and increase overall ad prices. This would effectively boost Facebook’s 0s advertising revenue.

Zuckerberg also reiterated other advantages of Libra, pointing out the payments infrastructure “hasn’t been updated in a very long time.” China, which has plans to launch its own digital currency called DCEP, sees Libra as more than a way for Facebook to make money.

Libra Could Hit China’s Efforts to Increase Yuan Influence

In a book published by the Central Party School of China to educate government officials on digital currency and propose policy measures to deal with emerging challenges like the Libra project, experts argue the latter is an excellent example of a public-private partnership and has the potential to become the future of world currency.

This would mean, according to the book titled “Discussing Digital Currency with Leading Officials,” that Libra could get in the way of the Chinese government’s attempt to increase the influence of the yuan.

Hongzhang Wang, former chairman of the China Construction Bank and one of the authors on the book’s preface, said in a recent article:

China originally relied on mobile payment to get ahead, but now Libra has the potential to change the game again.

Wang added that this would allow companies in the U.S. to build a digital currency system that could “threaten or even surpass” Alipay and WeChat Pay using blockchain technology.

Featured image via Unsplash.