The U.S. Securities and Exchange Commission (SEC) approved the listing of 11 Bitcoin spot ETFs on the 11th, raising market concerns about the possibility of a Taiwanese version of a Bitcoin ETF. However, the Financial Supervisory Commission (FSC) stated that according to existing regulations, Bitcoin is not considered a security and is not an eligible component for tracking by ETFs. Therefore, asset management companies cannot issue Bitcoin ETFs.
The SEC officially approved the listing of 11 Bitcoin spot ETFs from BlackRock, Ark Investment/21Shares, Fidelity, Invesco, and VanEck on the 11th. The total trading volume reached over 4.6 billion USD on the first day of trading, sparking discussions about whether Taiwan will follow suit and open up to this market.
In Taiwan, it is not possible to issue Bitcoin ETFs. According to a report by the Commercial Times, Huang Hou-ming, Deputy Director-General of the Securities and Futures Bureau of the FSC, stated on the 11th that according to Article 37 of the Regulations Governing Securities Investment Trust Funds, the index components tracked by ETFs must be “securities,” such as stocks, bonds, or other approved securities. However, Bitcoin is not an approved security. According to current regulations, asset management companies cannot issue ETFs that track Bitcoin as an investment target.
As for whether domestic asset management companies can issue funds to track U.S.-listed Bitcoin ETFs, Huang Hou-ming stated that single-link funds are not allowed. As for portfolio funds (fund of funds), there are currently no relevant regulations, but they would still need to be submitted for review.
According to Huang Hou-ming, there are currently no asset management companies applying to the FSC to issue funds investing in Bitcoin. However, there are indeed funds related to investing in Bitcoin-related companies, which do not directly invest in Bitcoin itself. It is similar to gold funds not investing in gold, but rather investing in stocks of gold-related companies.
Regarding whether there will be modifications to the Regulations Governing Securities Investment Trust Funds in the future to allow Bitcoin ETFs, Huang Hou-ming pointed out that currently, only the U.S. and Hong Kong have approved the issuance of Bitcoin ETFs. Taiwan would need to conduct further research and collect data from various countries before evaluating the possibility of amending the regulations.
However, Huang Hou-ming emphasized that all funds that want to be issued and sold to investors in Taiwan must apply for approval or file with the FSC. Therefore, selling Bitcoin ETFs domestically, regardless of whether they are domestic or foreign funds, is illegal.
Can Taiwanese investors purchase U.S.-listed Bitcoin spot ETFs? Based on the statements of the FSC, it is unlikely that Taiwan will have cryptocurrency ETF products in the short term. However, if Taiwanese investors are interested in investing in U.S.-listed Bitcoin spot ETFs, they can still open accounts with U.S. stock brokers for investment. The trading options include U.S. stocks, ETFs, options, futures, bonds, foreign exchange, mutual funds, cryptocurrencies, etc.
As for whether it is possible to invest through securities firms’ delegated commission, the FSC stated that delegated commission is different from solicitation and sales within Taiwan. The FSC is currently studying whether to allow it and will have results in the near future.
As for the possibility of launching Bitcoin spot ETFs in Taiwan in the future, industry insiders bluntly state that it is currently unlikely. This is because the regulatory authorities in Taiwan still have a lot of discussions regarding the supervision of cryptocurrencies. Without supporting measures in place, the probability of seeing such products in the Taiwanese market is extremely low.