Taiwan FSC Greenlights Crypto ETFs for Professional Investors

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Taiwan Financial Supervisory Commission (FSC) has reportedly allowed professional investors to access cryptocurrency exchange-traded funds (ETFs), including Bitcoin ETFs, through a re-entrustment method.

This strategic move arrives at a time when demand for spot Bitcoin ETFs is escalating, particularly as Chinese lawmakers contemplate a cautious shift toward cryptocurrency regulation.

In its recent announcement, the FSC revealed that it is engaging in consultations with the Securities Business Association of the Republic of China to assess the investment risks associated with foreign crypto ETFs.

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The objective behind this initiative is twofold: to diversify investment opportunities for professionals and to bolster the re-entrustment business for securities firms operating in Taiwan. Consequently, the FSC encourages professional investors to navigate the high-risk landscape of crypto ETFs via re-entrustment, which facilitates a structured approach to investment.

Targeted Access for Professional Investors

While this development marks a major advancement in Taiwan’s crypto investment environment, retail investors are currently excluded from participating in crypto ETFs. The FSC has specified that only professional investors, including institutional players, high-net-worth legal entities, and individuals with substantial asset portfolios and relevant investment experience, will have access to these investment vehicles.

Furthermore, securities firms looking to provide exposure to Bitcoin ETFs must first secure board approval. They are also tasked with evaluating their clients’ knowledge and experience with virtual assets before enabling any investment.

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For non-institutional clients, the FSC mandates that a risk warning letter must be signed before the initial purchase of a crypto ETF. Additionally, securities firms must furnish detailed product information and engage in regular education sessions about virtual assets and related investment products.

Global Momentum for Bitcoin ETFs

The global appetite for spot Bitcoin ETFs continues to soar, with over $1 billion in inflows reported in the United States just last week. This trend is not confined to Taiwan; earlier this year, Thailand’s SEC approved asset management firms to provide Thai institutional investors with exposure to U.S. spot Bitcoin ETFs.

Meanwhile, markets such as Hong Kong and Australia have also introduced regulated environments for investing in Bitcoin ETFs, catering to the growing interest from institutional and retail investors alike.