Financial Crime World

Taiwan’s Financial System Assessment Reveals Electronic Payment Growth and Caution on Virtual Currencies

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Executive Summary

The Central Bank of China (CBC) has released its latest Financial Stability Report, highlighting the significant growth in electronic payment transactions in Taiwan. While the report notes that the majority of these transactions were conducted through traditional methods such as bank accounts, credit cards, and cash cards, it also cautions investors about the risks associated with virtual currencies.

Electronic Payment Growth

According to the report, the total value of electronic payments in Taiwan reached NT$615 trillion in 2016, a staggering 36 times the size of the country’s GDP. The CBC has established a comprehensive electronic payment and clearing system to ensure the security and efficiency of large-value payments, which is expected to facilitate compliance with regulations governing foreign exchange receipts and disbursements.

Concerns about Virtual Currencies

However, the report also highlights concerns about virtual currencies, such as bitcoin, which are considered high-risk investments due to their volatility and lack of regulation. The CBC has reminded investors of the risks associated with these commodities and has initiated research on digital currency issues.

Central Banks’ Stance on Digital Currencies

While some central banks have expressed interest in exploring digital currencies, none have yet issued one. Jerome H. Powell, governor of the US Federal Reserve System, recently expressed a conservative attitude towards central banks issuing digital currencies, citing concerns about security and privacy protection.

CBC’s Response

In response to these developments, the CBC has set up a group to monitor emerging technologies, including blockchain, and plans to conduct proof-of-concept tests to assess their feasibility in financial services. The bank aims to promote the development of domestic electronic payment systems while also ensuring the stability of the financial system.

Key Points

  • Electronic payment transactions in Taiwan reached NT$615 trillion in 2016.
  • Credit cards and cash cards accounted for most transactions, with electronic money accounting for only a small portion.
  • The CBC has established a comprehensive electronic payment and clearing system to ensure security and efficiency.
  • Virtual currencies, such as bitcoin, are considered high-risk investments due to their volatility and lack of regulation.
  • The CBC has reminded investors of the risks associated with virtual currencies and initiated research on digital currency issues.
  • Central banks have expressed interest in exploring digital currencies, but none have yet issued one.

Contact

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