Taiwan opens digital asset ETF market for professionals.

In a September 30 announcement, the FSC stated that this move is intended to expand "product choices" and "open investment channels for professional investors," enhancing Taiwan’s financial market competitiveness. 

The FSC emphasized that it will continue monitoring the virtual asset market, with a focus on risk management and regulatory compliance.

Historically, Taiwan has taken a cautious stance on digital assets like cryptocurrencies, citing concerns about risks such as fraud and volatility. The FSC has implemented strict Anti-Money Laundering regulations, particularly targeting cryptocurrency exchanges.

The government has supported efforts like the 2018 FinTech Regulatory Sandbox, which allows startups and financial institutions to test innovative business models without full regulatory compliance.

This regulatory shift toward allowing digital asset ETFs in Taiwan aligns with policies in other global financial centers, such as Hong Kong and Singapore. 

By restricting professional investors' access to these high-risk investments, Taiwan seeks to balance exposure to digital assets while managing associated risks. Digital asset ETFs are classified as “high-risk investments” in Taiwan, and companies handling them must adhere to FSC regulations for professional investors.

While Taiwan is gradually embracing digital asset ETFs, its central bank remains cautious about launching a central bank digital currency (CBDC). Yang Chin-long, the president of Taiwan's Central Bank, has previously stated there is no urgency to introduce a CBDC, favoring a gradual approach over competing with other nations.

Taiwan has developed a CBDC protocol for retail payments and is working on a proof-of-concept for wholesale CBDCs. Still, the central bank’s cautious approach is consistent with the government’s broader digital policy objectives.