The Financial Supervisory Commission (FSC) of Taiwan has given the green light for qualified professional investors to access foreign exchange-traded funds (ETFs) that are crypto-based.
This new initiative, which was revealed on September 30, incorporates a re-entrustment model specifically designed for these investments.
Through this model, Taiwanese investors now have the ability to invest in foreign digital asset ETFs via vetted local financial institutions, which will serve as intermediaries and ensure adherence to both local and global regulations.
Investment Eligibility Criteria
Nonetheless, the FSC has placed restrictions on access, considering the perceived heightened risks associated with cryptocurrency investments. According to the regulator:
“Eligible professional investors comprise institutional investors, high-net-worth individuals, investment entities, and natural persons with investment expertise.”
Additionally, securities firms are required to implement a board-approved suitability assessment system that evaluates a client’s knowledge and experience with virtual asset ETFs prior to permitting investment.
The FSC also insists on continuous education for business personnel regarding digital assets. Most clients will need to sign a risk disclosure statement before making their inaugural investment. The regulator emphasized:
With this advancement, Taiwan aligns itself with numerous countries embracing crypto-financial products in spite of prevailing global regulatory challenges. The FSC intends to keep a close watch on the sector to safeguard investors while fostering healthy competition among Taiwan’s securities firms.
Spot Bitcoin ETFs
Since their introduction in January, spot Bitcoin ETFs have captured considerable interest and attracted noteworthy investments from institutional players. These ETFs provide an uncomplicated method for incorporating Bitcoin into investment portfolios, eliminating the hassles of direct acquisitions and secure storage measures.
Data reveals that over 1,000 institutional investors have gained exposure to this emerging market via these funds. According to Andre Dragosch, Head of European Research at Bitwise, U.S. spot Bitcoin ETFs alone amassed more than a month’s worth of newly mined Bitcoin within a single week.
He noted:
“Last week, U.S. spot Bitcoin ETFs purchased a total of 16,774 BTC, while BTC miners typically generate around 13,500 BTC in a month.”