With the new cabinet taking office, it is expected that the prohibition on investing in Bitcoin spot ETF through delegated investment will be lifted in Taiwan. The newly appointed Chairman of the Financial Supervisory Commission (FSC), Peng Chung-Kang, stated today that the Securities Association had proposed a plan on April 24 to allow professional investors to invest in overseas Bitcoin spot ETF through delegated investment, with the requirement of signing a risk disclosure statement for initial investments.
Summary:
Blockchain legislator, Gou Ru-Jyun, questioned the FSC on the prohibition of delegated investment in Bitcoin ETF, and Huang Tian-Mu stated that BTC has no intrinsic value.
Background:
Will Taiwan lift the ban on delegated investment in Bitcoin ETF? FSC: Decision could be made as early as next month.
Table of Contents:
FSC plans to prioritize investment by professional investors.
Legislator Gou Ru-Jyun urges opening to general investors as well.
Will virtual currency ETF be listed?
In January, the United States approved the listing of 11 Bitcoin spot ETFs, including BlackRock, attracting a net fund inflow of over $13.1 billion. The total assets under management of the 11 ETFs reached $58.9 billion. However, according to existing regulations in Taiwan, Bitcoin is not considered a security and is not an eligible component for ETF tracking. Therefore, Taiwanese fund managers cannot issue Bitcoin ETFs.
Currently, Taiwan also cannot buy or sell overseas Bitcoin spot ETFs through delegated investment. Several Taiwanese securities firms announced on January 23 that they received notices from regulatory authorities, temporarily allowing only the sale of entrusted trading of foreign securities linked to virtual currency (such as Bitcoin) spot and futures-related products, due to the high price volatility and risks associated with virtual currency commodities. However, with the new cabinet taking office, it is expected that delegated investment in Bitcoin spot ETFs will be approved.
Today, the newly appointed Chairman of the FSC, Peng Chung-Kang, made his first visit to the Finance Committee of the Legislative Yuan to report on his work and answer questions. When questioned by legislator Gou Ru-Jyun about whether delegated investment in Bitcoin spot ETFs will be allowed, he revealed that the Securities Association had proposed a plan on April 24, hoping to open it with two conditions.
Peng Chung-Kang pointed out that since South Korea and Japan have not opened up, and Singapore and Hong Kong have conditions for approval, the Securities Association proposed opening it based on international experience. However, the proposed plan includes two aspects:
First, it suggests opening to professional investors, including corporations or natural persons with assets exceeding NT$30 million, instead of directly opening it to the general public.
Second, investors must sign a risk disclosure statement before engaging in delegated investment.
As for the exact time for opening delegated investment in Bitcoin spot ETFs, Peng Chung-Kang stated that a decision is expected to be made before the end of this year.
At the same time, Gou Ru-Jyun advocated that not only should corporations be allowed to invest, but the FSC should also open Bitcoin spot ETFs to the general public. He reiterated his statement during the questioning of Huang Tian-Mu in March, emphasizing that the lack of an official path for delegated investment will force the public to purchase from overseas securities firms, making it more difficult for the government to monitor the public’s investment in Bitcoin ETFs. Securities firms will also lose commission income, and if the public encounters investment disputes with overseas securities firms, they will have to bear the risk themselves and may even fall into fraudulent traps without protection, resulting in a lose-lose situation for the government, securities firms, and the public.
In addition, Zhang Zhen-Shan, Director of the Securities and Futures Bureau of the FSC, stated that in terms of mutual funds, since Bitcoin is not considered a security, mutual 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, a clear policy will be discussed by the end of this year.
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