With the new cabinet taking office, it is expected that the Taiwan Financial Supervisory Commission (FSC) will lift the ban on investing in Bitcoin spot ETFs through delegated investment. The newly appointed FSC Chairman, Peng Cheng-chung, stated today that the Securities and Futures Institute has proposed a solution on April 24, which involves opening up delegated investment in overseas Bitcoin ETFs for professional investors and requiring the signing of a risk disclosure statement for initial investments.
(Previous Summary:
Blockchain legislator | Ke Ju-chun questions FSC on “prohibition of delegated investment in Bitcoin ETFs”, Huang Tian-mu: BTC has no intrinsic value)
(Supplementary Background:
Will Taiwan lift the ban on delegated investment in Bitcoin ETFs? FSC: Decision to be made as early as next month)
Table of Contents:
FSC plans to prioritize investment by professional investors
Legislator Ke Ju-chun urges opening up to general investors as well
Will virtual currency ETFs be listed?
In January, the United States approved the listing of 11 Bitcoin spot ETFs including BlackRock, attracting a net inflow of over 13.1 billion US dollars. The total asset management scale of these 11 ETFs reached 58.9 billion US dollars. However, according to current regulations in Taiwan, Bitcoin is not considered a security and is not a trackable component for ETFs. Therefore, Taiwanese fund managers cannot issue Bitcoin ETFs.
Currently, Taiwan is also unable to trade overseas Bitcoin spot ETFs through delegated investment. Several Taiwanese securities firms announced on January 23 that, based on instructions from the regulatory authority, in order to protect investors due to the high volatility and risks of virtual currency commodity prices, they can only accept orders for selling foreign securities linked to virtual currencies (such as Bitcoin) and related futures commodities, and cannot accept new orders for buying.
However, with the new cabinet taking office, it is expected that delegated investment in Bitcoin spot ETFs will be given the green light.
On his first visit to the Legislative Yuan Finance Committee today to present a business report and respond to questioning, FSC Chairman Peng Cheng-chung revealed in response to questioning by legislator Ke Ju-chun about the opening of delegated investment in Bitcoin spot ETFs that the Securities and Futures Institute had proposed a solution on April 24, hoping to open it up under two conditions.
Peng Cheng-chung pointed out that while South Korea and Japan have not opened up, Singapore and Hong Kong have done so with conditions. Taking international experience into consideration, the Securities and Futures Institute proposed opening up. However, they put forward two accompanying proposals:
The first is to first open it up to professional investors, including corporations or individuals with assets exceeding 30 million NTD, rather than directly opening it up to the general public.
The second is that investors must sign a risk disclosure statement before engaging in delegated investment.
Regarding the exact timing of opening up delegated investment in Bitcoin spot ETFs, Peng Cheng-chung stated that a decision is expected to be made before the end of this year.
At the same time, Ke Ju-chun called for not only opening it up to corporations but also to the general public to invest in Bitcoin spot ETFs. He reiterated his statement during the questioning of Huang Tian-mu in March, emphasizing that the lack of an official delegated investment channel would force the public to only purchase from overseas securities firms, making it more difficult for the Taiwan government to monitor the investment situation of the public in Bitcoin ETFs. Securities firms would also lose out on commission income, and if the public were to encounter investment disputes with overseas securities firms, they would have to bear the risks themselves and could potentially fall into fraudulent traps without protection, resulting in a lose-lose-lose situation for the government, securities firms, and the public.
In addition, Zhang Zhen-shan, Director-General of the FSC’s Securities and Futures Bureau, stated that for investment funds, as Bitcoin is not considered a security, investment funds cannot issue Bitcoin ETFs. However, some entities have proposed lobbying for the introduction of foreign Bitcoin ETF products, and the FSC has asked the Investment Trust and Consulting Association to study this. As for whether Taiwan will allow the listing of virtual currency ETFs domestically, clear policies will be discussed before the end of this year.