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.

German Finance Minister Wants to Stop Libra From Launching

  • German Finance Minister Olaf Scholz says the launch of Facebook's libra should be prevented. 
  • G7 meeting issued a report arguing that digital currencies pose a risk to international financial stability.

Germany's Finance Minister has said that the launch of Facebook’s digital currency libra should be prevented. 

Olaf Scholz told reporters at the IMF and World Bank fall meetings in Washington that he had significant concerns over Facebook’s libra and other digital “world” currencies. 

He claimed to be “highly skeptical” of the project, saying, 

We will carefully monitor the situation with all the means at our disposal. I am not in favour of the successful creation of such a world currency because that is the responsibility of democratic states.

The G7 countries released a report following their meeting on Oct. 17 arguing that digital currencies like libra should not be allowed to launch due to the risks they pose on an international scale. The group said that stablecoins, including Facebook’s libra, have the potential to threaten the world’s monetary system and financial stability, in addition to lacking proper regulation. 

Scholz said there is a “need for reform” in the financial sector before digital currencies can be safely implemented, highlighting the existing inefficiencies in cross-border payments. 

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