Not just the Federation! Various banks are considering "blocking exchange deposits and withdrawals." How does Taiwan's crypto work?
The Commonwealth Bank announced that it will close the contracted transfers of crypto exchanges within two months. The contracted flow of funds to crypto exchanges in Taiwan has been reduced by one more. It is rumored that various banks are also considering cutting off the exchanges' contracted transfer channels.
(Preliminary summary: 6 key points of the public hearing on Taiwan's encryption law "Virtual Asset Services Act": Unlicensed operators will be dealt with more severely if they are involved in fraud!)
(Background supplement: Taiwan Bank's new system is on the way: accounts have been frozen for half a year without transactions, "withdrawals and transfers cannot be made", and users complained that it was disturbing)
The Federal Bank dropped a shock bomb on June 11: Immediately suspending the transfer of Taiwan dollars agreed to by virtual currency exchanges, August Starting from the 11th, transfers to already opened bound accounts will also be terminated. Restrictions include automated teller machines (ATMs), personal online banking, federal mobile banking and telephone banking. For investors who are accustomed to depositing and withdrawing funds from their federal bank accounts, there is suddenly a new blockade.
Banks are worried about the risk of fraud
Less than two hours after the announcement was released, a large number of inquiries flooded into the customer service mailboxes of local exchanges such as BitoPro and MaiCoin. At present, only accounts bound to the exchange can be used to make non-agreed remittances at the counter, with a single limit of 300,000 yuan and a daily upper limit of 500,000 yuan.
In March, Chunghwa Post quietly closed the same service. According to the Free Times,Many banks are formulating the same plan, and there may be more than two cases of disconnecting deposits and withdrawals from crypto exchanges. The main reason is that the proportion of fraud warning users with financial flows in and out of crypto exchanges is too high.
Specialized laws are advancing, but reality is fading
The Financial Supervisory Commission is advancing the draft of the Virtual Asset Services Law, and the Central Bank has simultaneously called for strengthening stablecoin management. Exchange operators are the main players, and banks, which are mainly stablecoin businesses, are advancing in both directions at the same time; however, banks have withdrawn their cash flow connections with crypto exchanges in order to "prevent fraud," making the exchanges' business more difficult.
Further reading: Six key points from the public hearing on Taiwanâs encryption law, the âVirtual Asset Services Actâ: Unlicensed operators will be dealt with more severely if they are involved in fraud!
Banks have their own problems. They cannot exceed the warning account indicator. It is found that the proportion of warning accounts with financial flows in crypto exchanges is too high. In order to avoid unnecessary increases in internal costs and warnings from the Financial Supervisory Commission, banks have the autonomy to block accounts agreed on exchanges.
The reality is that exchanges, or any new crypto startups that include cash flow services, are frightened: banks are considering "closing" liquidity to prevent cash flows, and combating fraud is the most important issue in their hearts. The result is that cryptocurrency services are slowly being choked.
The author canât help but have a hunch: Will banks eat up all local encryption services? Banks can issue stablecoins, custody cryptocurrencies, and launch crypto trading services in the future. Arenât existing crypto industry players increasingly struggling?
The outline of crypto-financial cooperation and traditional financial cooperation seems unclear before the third reading of the special law. Perhaps the arrival of foreign capital will determine whether Taiwanâs crypto will embrace global liquidity or be trapped in a closed sandbox and low-risk financial flows.
