Bessie Liu

<div id="highlights-block_62dae0c60be70" class="highlights">
 <ul>
 <li>Taiwan’s FSC said credit cards should not be used for payments tied to gambling, stocks, futures, options and other transactions</li>
 <li>Credit card issuers in Taiwan have three months to make adjustments and comply with the new law</li>
 </ul>
 
</div>



Taiwan’s securities watchdog has implicitly banned cryptocurrency transactions with credit cards on the island nation.



The country’s Financial Supervisory Commission (FSC) issued a letter to the banking industry association earlier this month, asking that they not grant “merchant status” to virtual asset providers which service credit card holders.



Details of the letter stated that digital assets are highly speculative and prices are often extremely volatile, <a href="https://money.udn.com/money/story/5613/6476972" target="_blank" rel="noreferrer noopener">local media reported</a>. Further, credit cards should not be used for payments tied to gambling, stocks, futures, options and other transactions.



The move follows strict anti-money laundering laws for cryptocurrency services providers enacted last July.



Credit card issuers in Taiwan have been given three months to make adjustments and comply with the new law. Once that time is up, an independent audit unit will review compliance and report results to the FSC, which is effectively Taiwan’s equivalent of the Securities and Exchange Commission.



Cryptocurrency is tightly regulated in neighboring China, but lawmakers worldwide have looked to <a href="https://cms.blockworks.co/congress-mulling-stablecoin-regulation-after-terra-crash/" target="_blank" rel="noreferrer noopener">hasten crypto supervision</a> following the implosion of <a href="https://cms.blockworks.co/tag/terra/" target="_blank" rel="noreferrer noopener">Terra</a>’s algorithmic stablecoin in May, which sent <a href="https://cms.blockworks.co/how-cryptoasset-markets-have-changed-since-terra-crash/" target="_blank" rel="noreferrer noopener">cryptocurrency markets tumbling</a>.



The UK recently <a href="https://cms.blockworks.co/uk-to-regulate-stablecoins-as-a-form-of-payment-via-new-bill/" target="_blank" rel="noreferrer noopener">introduced a new bill</a> that seeks to regulate stablecoins and Russia has <a href="https://cms.blockworks.co/putin-amends-law-to-broaden-russias-crypto-payments-ban/" target="_blank" rel="noreferrer noopener">extended its crypto payments ban</a> to specifically include security tokens, utility tokens and non-fungible tokens (NFTs).



Meanwhile, the Taiwanese central bank has been exploring a no-interest CBDC (central bank digital currency). The CBDC is in its second stage of development and is currently being distributed in five selected Taiwanese banks.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Taiwan Bans Crypto Purchases Using Credit Cards

Sam Reynolds

<div id="highlights-block_619f8361ab0fa" class="highlights">
 <ul>
 <li>A CNN affiliate in India has confirmed that the government isn’t seeking a total crypto ban with its new bill, but rather mechanisms to regulate the asset class as a commodity</li>
 <li>The government is particularly concerned about crypto’s potential role in financing terrorism</li>
 </ul>
 
</div>



On Wednesday, Blockworks reported on language <a href="https://cms.blockworks.co/india-crypto-ban-about-payments-not-the-asset-class/" target="_blank" rel="noreferrer noopener">in a recent bill before India’s parliament</a> that mentioned a ban of all “private cryptocurrency”. Local media in the country have now confirmed with their government sources that the government’s intent is something different. 



According to a local CNN Affiliate in-country, the government intends to regulate crypto and is primarily concerned with its use in the underground economy and terror financing. A wholesale ban is not in the works.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/hashtag/Breaking?src=hash&amp;ref_src=twsrc%5Etfw">#Breaking</a> | <a href="https://twitter.com/hashtag/Exclusive?src=hash&amp;ref_src=twsrc%5Etfw">#Exclusive</a> | Top Government Sources on Cryptocurrency Regulation: There is no ban on <a href="https://twitter.com/hashtag/Crypto?src=hash&amp;ref_src=twsrc%5Etfw">#Crypto</a>. A regulation mechanism will be in place so that it’s not misused. <a href="https://twitter.com/hashtag/CryptoNews?src=hash&amp;ref_src=twsrc%5Etfw">#CryptoNews</a> (Exclusive Input: <a href="https://twitter.com/manojkumargupta?ref_src=twsrc%5Etfw">@manojkumargupta</a>)<a href="https://twitter.com/maryashakil?ref_src=twsrc%5Etfw">@maryashakil</a> shares more details with <a href="https://twitter.com/JamwalNews18?ref_src=twsrc%5Etfw">@JamwalNews18</a> <a href="https://t.co/s8LzFXjNgo">pic.twitter.com/s8LzFXjNgo</a>&mdash; News18 (@CNNnews18) <a href="https://twitter.com/CNNnews18/status/1463364400304345090?ref_src=twsrc%5Etfw">November 24, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



To do this, the government intends to not recognize crypto as tender and put in a comprehensive KYC/AML mechanism at the various fiat gateways in-country.&nbsp;



&#8220;A strict mechanism will be in place so that law enforcement agencies can trace the origin of cryptocurrency used for illegal or anti-national work,&#8221; CNN’s sources said.&nbsp;



Speaking with CNBC’s Squawk Box Asia, Avinash Shekhar, co-CEO of Zebpay, an exchange, said that their initial discussions with the government had “positive vibes.” “There has been lots of positive vibes from the government. We met the finance committee of Parliament around two weeks back,” he told CNBC.



<blockquote class="wp-block-quote">“The message or the feelers which we are getting from the government is that they’re looking for some kind of regulation — strict regulation, but not a complete ban.”</blockquote>



Regardless, local traders in India engaged in extensive panic selling, thinking that the ban would be more extensive than initially reported.&nbsp;



On WazirX, an Indian exchange, bitcoin traded at a 15% discount at one point before recovering.



<figure class="wp-block-image size-full"><img decoding="async" loading="lazy" width="944" height="574" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png" alt="" class="wp-image-11819" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=944 944w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=423 423w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=429 429w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=360 360w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/Screenshot-2021-11-25-at-13.39.14.png?w=80 80w" sizes="(max-width: 944px) 100vw, 944px" /><figcaption>Source: WazirX</figcaption></figure>



Since then, the panic selling has subsided and prices have leveled out.&nbsp;



A <a href="https://www.bloomberg.com/news/articles/2021-11-24/india-is-said-to-mull-allowing-crypto-trading-for-some-investors" target="_blank" rel="noreferrer noopener">report from Bloomberg</a> also said that the government isn’t planning a wholesale ban, but may consider limiting the accessibility of exchanges to accredited investors.



Globally, the price of bitcoin has remained steady at $57,984 down 2.4% over the last 24 hours according to <a href="https://www.coingecko.com/en/coins/bitcoin" target="_blank" rel="noreferrer noopener">CoinGecko</a>.



<hr class="wp-block-separator">
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<hr class="wp-block-separator">

India’s Government to Regulate, Not Ban Crypto

<div id="highlights-block_619e37a3f1635" class="highlights">
 <ul>
 <li>India’s crypto ban is about ensuring that digital assets aren’t used for payments, thereby dodging taxes, and to allow for digital assets to be regulated via the Securities and Exchange Board of India</li>
 <li>The bill also provides means for the Reserve Bank of India to create a Central Bank Digital Currency</li>
 </ul>
 
</div>



Recent legislative proposals by India’s government are not seeking to ban cryptocurrency outright, but rather create a legislative framework to regulate it as a security while prohibiting it as a payment method and instead promoting an Indian Central Bank Digital Currency (<a href="https://cms.blockworks.co/?s=cbdc" target="_blank" rel="noreferrer noopener">CBDC</a>).



The bill, <a href="http://loksabhadocs.nic.in/bull2mk/2021/23.11.21.pdf" target="_blank" rel="noreferrer noopener">titled</a> the “Cryptocurrency &amp; Regulation of Official Digital Currency Bill 2021” is identical to one proposed in Parliament last year in New Delhi.  



“This bill actually facilitates the allocation of a budget for the creation of a fiat cryptocurrency called the digital Rupee and creates the infrastructure required for mass adoption and usage in the country just like China,” Harsh Rajat, Founder of the Ethereum Push Notification Service, explained to Blockworks.



<blockquote class="wp-block-quote">“However, no blanket ban is proposed on other currencies. The RBI wants the digital Rupee to have a significant place in the Indian economy.”</blockquote>



One difference between this year and last year is that lawmakers know a lot more about crypto, Nischal Shetty, CEO of WazirX, an Indian crypto exchange, tweeted.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">-Don&#39;t believe there will be a blanket ban on crypto -Clarity on classification of crypto is important -Lawmakers understand crypto much better now vs a year ago Nischal Shetty, WazirX on CNBC-TV18&mdash; db (@tier10k) <a href="https://twitter.com/tier10k/status/1463467390205927424?ref_src=twsrc%5Etfw">November 24, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Mikkel Morch, a director at digital assets hedge fund ARK36 said in an emailed statement that “an outright ban on such investments might be difficult to implement as the digital asset ecosystem in India extends far beyond cryptocurrencies and includes other investable assets such as NFTs which are becoming increasingly popular in India.”



In a tweet thread, Sino Global Capital pointed out that the law is vague and ambiguous, so it is not quite clear what is meant by “private cryptocurrency” — which would be banned under one interpretation of the bill. &nbsp;&nbsp;



“There is no clear definition as to what private cryptocurrencies are. The bill will need to define the same. It can mean any one of the 3 or a totally new definition,” Sino Global tweeted.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">This final interpretation is highly unlikely considering that the Govt understands that the retail investors have invested close to $6.6 billion in the sector. The industry also directly and indirectly employs 50k people. The Govt understands the international regulatory..&mdash; Sino Global Capital (@SinoGlobalCap) <a href="https://twitter.com/SinoGlobalCap/status/1463195096493350912?ref_src=twsrc%5Etfw">November 23, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The fund doesn’t think that it means all blockchain-based digital assets, aside from the one created by the government of India.&nbsp;



That interpretation is “highly unlikely considering that the Govt understands that the retail investors have invested close to $6.6 billion in the sector. The industry also directly and indirectly employs 50,000 people,” they tweeted.&nbsp;



But, the contents of the bill are also subject to change throughout the legislative parliament based upon input from the parliamentary committee consisting of members of the opposition parties.&nbsp;



“It is also important to note that this is what the government thinks should be the law and is in no means the final shape of the law. It has to be debated and passed by the parliament to become law,” they concluded.



<hr class="wp-block-separator"/>
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<hr class="wp-block-separator"/>

India Crypto Ban About Payments, Not the Asset Class

<div id="highlights-block_61537ccb6d52a" class="highlights">
 <ul>
 <li>China’s recent ‘ban’ on crypto was simply a reaffirmation of the lack of legal avenues for consumer protection </li>
 <li>While some exchanges have signalled that they are halting new user signups and moving operations offshore, their OTC operations continue unabated </li>
 </ul>
 
</div>



Despite reports of a ‘ban’ on cryptocurrency in China, the RMB-USDT currency pair continues to post significant volume while OTC desks remain active in the country.&nbsp;



China-focused exchanges OKEX and Huobi still offer the RMB-USDT, as do Binance, KuKoin, and Gate.io. According to pricing data reviewed by Blockworks, price slippage is stable only down approximately 1% from the official RMB-USD exchange rate.



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="236" height="512" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/China-bitcoin-trade.jpg" alt="" class="wp-image-8698" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/China-bitcoin-trade.jpg?w=236 236w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/China-bitcoin-trade.jpg?w=138 138w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/China-bitcoin-trade.jpg?w=118 118w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/China-bitcoin-trade.jpg?w=120 120w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/China-bitcoin-trade.jpg?w=101 101w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/China-bitcoin-trade.jpg?w=37 37w" sizes="(max-width: 236px) 100vw, 236px" /><figcaption>Source: OKEX being used to buy USDT from within China on Sept 28, 2021 </figcaption></figure></div>



The specific type of trade popular on these exchanges involves an OTC desk, which links together traders in a peer-to-peer fashion. The buyer would initiate a bank transfer to the seller’s designated account, and upon receipt of the transfer they would release the digital asset on the exchange.&nbsp;



“In China, there’s always a way to move around things and then get back,” Tony Ling, a Hangzhou-based partner at Bizantine Capital said to Blockworks via WeChat. “In the western world, illegal means illegal. It’s direct.”



To be sure, possession of crypto and peer-to-peer <a href="https://cms.blockworks.co/no-china-didnt-ban-crypto-its-just-pushing-exchanges-offshore/" target="_blank" rel="noreferrer noopener">aren’t illegal</a> in China. Rather, the government pointed out with its announcement last week, there’s simply no legal codification for crypto within China so in the event of a dispute it&#8217;s not possible to use the court system to resolve things. Securities laws, however, prohibit exchanges from offering RMB-denominated crypto pairs which is why OTC is popular



Ling also noted that around China’s national holidays everything becomes more rigorous and strict. Recently, <a href="https://www.theblockcrypto.com/linked/118878/coingecko-coinmarketcap-blocked-china-internet-firewall" target="_blank" rel="noreferrer noopener">The Block reported</a> that some of the largest portals for digital assets data like CoinMarketCap and CoinGecko are now inaccessible from within China without a VPN. 



However, other large data portals for digital asset prices like CryptoCompare and Crypto.com are not blocked in China according to <a href="https://en.greatfire.org/crypto.com" target="_blank" rel="noreferrer noopener">GreatFire</a>, a service to check if sites are blocked within China. 



“But you never know if, tomorrow, exchanges like OKEX will shut down and leave China forever. But until now, things are still going on,” Ling said. 



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a> in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



<hr class="wp-block-separator"/>

Many Exchanges in China Continue to Operate OTC Desks Despite ‘Ban’

<div id="highlights-block_6151dee6f0e2a" class="highlights">
 <ul>
 <li>Nuances in the language of a recent PBOC announcement led some to believe that China had made cryptocurrency illegal, whereas the announcement was really a clarification that there is significant risk in crypto ownership that the law can’t protect against</li>
 <li>The notice provides guidance that OTC desks and exchanges may be subject to criminal liability should they be tied to money laundering, gambling, securities offerings, or RMB-crypto conversion </li>
 </ul>
 
</div>



The People’s Bank of China’s recent <a href="https://cms.blockworks.co/cryptos-decline-as-china-doubles-down-on-regulations-markets-wrap/" target="_blank" rel="noreferrer noopener">crypto-themed announcement</a> shouldn’t be thought of as a definite out-and-out ban on crypto in-country, but rather as another warning, Bizantine Capital’s March Zheng, explained to Blockworks in an interview.



Zheng, a partner at the Shanghai-based fund, noted that there was nothing in the <a href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4348521/index.html" target="_blank" rel="noreferrer noopener">announcement</a> that specifically banned crypto, but rather it was a warning to the public that crypto comes with significant risk and a warning to exchanges that the money transmitter regime is getting stronger. 



“There is currently still no legal guidance that defines mainland Chinese citizens owning crypto assets as being illegal,” Zheng told Blockworks. “The text can be interpreted that because there is no legal framework in terms of ownership, there is potential investment risk because the law cannot protect consumers.”



This announcement echoes <a href="https://mp.weixin.qq.com/s/nCAAidK-dAHODdUTJ3f6CQ" target="_blank" rel="noreferrer noopener">prior court rulings</a> from Shandong, a province in China’s east, that came out in August which said that “the behavior of investing or trading cryptocurrency is not protected by law” after the defendant asked for compensation for a digital asset transaction gone wrong. “Regular investors should protect their personal property and stay away from virtual currencies,” the presiding judge wrote.   



Transacting cryptocurrencies itself has no legal protection, Zheng explained. However, the conversion of crypto-to-fiat will be monitored under a stronger national money transmitter framework.



Previously, the transaction of crypto in China was subject to a constellation of local money transmitter laws — not dissimilar to the US — but this would change things. The elephant in the room is the vibrant USDT-RMB ecosystem in-country used to bypass capital controls that mainland Chinese citizens are subjected to (they can remit $50,000 a year overseas annually). This recent notice from the PBOC said that OTC desks which facilitate these transactions may be subject to criminal liability for facilitating the breach of capital controls.



As of now Huobi and OKEX, two large China-focused exchanges, are still accessible without VPN within China Zheng said. Binance is also still accessible.



However, Huobi and Binance <a href="https://www.bloomberg.com/news/articles/2021-09-25/crypto-exchange-stops-taking-china-users-as-beijing-widens-ban" target="_blank" rel="noreferrer noopener">announced over the weekend</a> that they have stopped letting new users in mainland China register. Huobi followed up by saying that it would “gradually retire existing mainland China user accounts by December while ensuring the safety of users’ assets.”&nbsp;



Zheng believes that this might be the beginning of the end, though the service is sure to continue elsewhere.&nbsp;



Given the increased scrutiny by authorities in Beijing, the USDT-RMB trading pair was down below the standard USD-RMB exchange rate to 6.12/USD, down from the usual 6.46.&nbsp;



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="244" height="380" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/USDT-RMB.jpeg" alt="USDT to Chinese RMB rate" class="wp-image-8614" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/USDT-RMB.jpeg?w=244 244w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/USDT-RMB.jpeg?w=193 193w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/USDT-RMB.jpeg?w=165 165w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/USDT-RMB.jpeg?w=168 168w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/USDT-RMB.jpeg?w=141 141w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/USDT-RMB.jpeg?w=51 51w" sizes="(max-width: 244px) 100vw, 244px" /></figure></div>



 But Zheng doesn’t think that this is the end of crypto in China — far from it. While there is a “brain drain” of talent to Singapore, Zheng points out that there are a number of offshore, USD-denominated Chinese funds buying up crypto which shows that Chinese interest in digital assets has been institutionalized. It just needs to happen offshore.



<hr class="wp-block-separator"/>



Are you a UK or EU reader that can’t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



<hr class="wp-block-separator"/>

cryptocurrency ban