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The 2013 Release by the Central Bank and FSC asserted that Bitcoin was not a currency, but a highly speculative digital virtual commodity. This view was reiterated in 2014, when the FSC ordered that local banks must not accept Bitcoin or provide associated services. The 2017 Release further cemented this government position.¹

Given the above, based on the regulatory regime in Taiwan, Bitcoin is not perceived as legal tender, currency or a widely-recognised medium of exchange; instead, it has been deemed a digital virtual commodity. This government stance, expressed in the aforementioned press releases, only applies to Bitcoin and does not encompass any other types of virtual currency or cryptocurrency (except for ICOs, as further outlined below). Nevertheless, we think that other virtual currencies and cryptocurrencies sharing comparable nature and characteristics must also be treated as digital virtual commodities.¹

A ruling issued by the FSC on 3 July 2019 officially designated cryptocurrencies as securities (i.e., security tokens) under the SEA (the 2019 Ruling). According to the 2019 Ruling, security tokens refer to those that:

• Utilise cryptography, distributed ledger technology or other similar technologies to represent their value that can be stored, exchanged or transferred through digital mechanisms
• Are transferable
• Encompass the following attributes of an investment: funding provided by investors; funding provided for a common enterprise or project; investors expecting to receive profits; and profits generated primarily on the efforts of the issuer or third parties. ¹

Virtual currencies in Taiwan

Fintech in Taiwan

Fintech in other countries

Notes

1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/taiwan