The Financial Supervisory Commission (FSC) of Taiwan today approved the application of Yongfeng Financial Securities to issue “stock gift cards.” This financial technology innovation experiment will last for one year, and the FSC has mandated that it must commence within three months of the approval, with a latest start date by the end of May. Recipients of the gift cards can purchase from a selection of 241 items, including Taiwan stocks and Taiwan Stock ETFs.
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Today (the 27th), the FSC announced the approval of Yongfeng Financial Securities’ application to issue “stock gift cards,” marking the 10th case approved for financial technology innovation experiments by the FSC. The experiment will last for one year and does not involve any legislative amendments; thus, it can be implemented immediately after the one-year period. Yongfeng Financial Securities must initiate the experiment by the end of May this year.
Stock gift cards can be used to buy 241 Taiwan stock items.
Hu Zehua, Director of the Innovation Department at the FSC, stated that this experimental project will see Yongfeng Financial Securities issuing and selling stock gift cards in electronic form, allowing purchasers to use them themselves or gift them to others. Holders of stock gift cards can log into the electronic platform of Yongfeng Financial Securities and enter a redemption code to convert the value of the gift card into usable funds for stock trading. (Currently, stock gift cards can only be used to purchase the 241 Taiwan stock items available through Yongfeng Financial Securities.)
Hu noted that the stock gift cards come in six denominations: NT$100, NT$300, NT$500, NT$1,000, NT$3,000, and NT$5,000. They can primarily be used to pay for stock settlement amounts, transaction fees, and trading taxes. An individual may purchase a maximum of NT$250,000 worth of stock gift cards. If there is any remaining balance, it can be stored in the settlement account of Yongfeng Financial Securities and can be converted to cash if not fully used.
To purchase stock gift cards, one must be a customer of Yongfeng Financial Securities, and the individual using the card must also be a customer of the same brokerage. Purchasers can buy directly online from Yongfeng Financial Securities or through corporate clients. Yongfeng Financial Securities is required to conduct customer due diligence (KYC) on the buyers. The stock gift cards can only be used to buy the 241 Taiwan stocks and ETFs available on the Fengcun Stock APP under Yongfeng Financial Securities.
If a stock gift card is not redeemed, the amount will be refunded to the purchaser. The stock gift cards do not have an expiration date; however, the experiment has a one-year limitation, with an estimated scale of NT$100 million. Yongfeng Financial Securities anticipates that the number of purchasers could reach 35,000, with 31,500 individuals redeeming the cards.
Hu mentioned that there has been no prior case of a securities firm issuing stock gift cards in Taiwan, making this initiative innovative. It has the potential to attract individuals who previously had no investment experience, offering them opportunities to engage with and learn about investment and financial management. For Yongfeng Financial Securities, this represents a new source of customer acquisition and enables more young people to enter the capital market through stock gift cards.
Future integration with blockchain technology?
If this product gains popularity among consumers, there may be considerations to integrate stock gift cards with blockchain technology. By utilizing the immutable characteristics of blockchain, the transparency and security of transactions could be enhanced. Through blockchain, the processes of issuing, purchasing, redeeming, and returning stock gift cards could all be recorded on a decentralized ledger, ensuring that each transaction is traceable and tamper-proof.
Furthermore, by leveraging blockchain technology, stock gift cards could be transformed into tradable tokenized assets, allowing cardholders to freely transfer or trade the gift cards on-chain, thereby enhancing liquidity. They could also be combined with other financial products, such as serving as collateral for loans, further improving capital efficiency.
