Taiwan Welcomes New Year with Bitcoin Warning
Published on December 31, 2013 at 11:50 BST
The Financial Supervisory Commission of the Republic of China and the Central Bank of the ROC have issued a joint statement warning against the use of bitcoin in Taiwan. The regulators said bitcoin remains volatile, that it does not have any legal protection, and that it is not issued by a monetary authority.
The regulators noted that bitcoin trading is highly speculative and that investors should be wary of volatility, cyber attacks, malicious defaults, theft and other risks. Apart from the now more-or-less standard list of warnings and concerns, the regulators also announced that they may take “necessary steps” if financial institutions engage in bitcoin operations, reported Taipei Times.
The reference starts to make sense when we consider that SinoPac Financial Holding Co. was an early supporter of bitcoin, allowing investments in bitcoins and trying to increase its popularity and use in e-commerce.
The regulators also warned that there is no guarantee of conversion:
“Bitcoin holders are on their own, as the currency is not issued by any monetary authority and is therefore not entitled to legal claims or guarantee of conversion.”
The warning comes as no surprise, as similar warnings have already been issued by regulators across the world. Last month Central Bank Governor Perng Fai-nan hinted at possible regulatory moves, saying that the bank is keeping a close eye on bitcoin development. At the time he compared bitcoin transactions to deals in precious metals.
Another interesting trend emerged over the last couple of weeks and it could have motivated Taiwanese regulators to react. After the Chinese central bank clamped down on local exchanges, one Taiwanese e-tailer decided to cash in, pledging to support bitcoin transactions as of early 2014. Wayi International Digital Entertainment hoped the China ban would simply drive shoppers to its new e-commerce site. This may be a shot across the bow to other merchants who were hoping to make some quick money following the ban in mainland China.
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