Make Taiwan a Digital Asset Hub! Legislators propose VASP tax incentives and domestic issuance of Bitcoin ETFs

Legislators propose offering tax incentives for VASP, establishing an education fund, and expanding access to Bitcoin ETFs. The Executive Yuan and the Financial Supervisory Commission (FSC) have promised to submit a related research report within one month, while details on expanding the delegated purchase of overseas crypto ETFs will be announced externally soon.

Legislators propose tax incentives for VASP and issuing Bitcoin ETFs

Yesterday (4/28), legislator Ge Rujun raised multiple suggestions during the general questioning session targeting Taiwan’s crypto industry, including expanding dedicated headcount, establishing an education fund, offering tax incentives for virtual asset service providers (VASP), expanding the availability of Bitcoin ETF(s) and stock tokenization, as well as studying virtual-asset strategic reserves, among other proposals.

Premier Su Tseng-chang pledged support for the organizational review, and FSC Chair Peng Jin-long said that several proposal items will be included in a related research report one month later.

Virtual asset education fund still needs evaluation

Taiwan’s first batch of compliant VASP operators has already been announced, and the draft Virtual Assets Service Act has also been submitted to the Legislative Yuan. In the future, cryptocurrencies are expected to move into public view in a more compliant manner, but related anti-fraud awareness and investment education are still not sufficient.

In response, Ge Rujun proposed setting up a “virtual asset education fund,” and suggested a model where the government and industry jointly contribute funds—for example, each side contributing 100 million NT dollars to jointly establish the fund.

Peng Jin-long responded that after referencing foreign systems, they found that most rely on voluntary resource inputs from industry players, and there is currently no financial-safety-net design in which the government co-funds.

However, he also promised that the FSC will further consolidate international practices and other feasible alternative options, and expects to provide a detailed research report within one month.

Source of image: Screenshot from legislator Ge Rujun’s general questioning session. Yesterday (4/28), legislator Ge Rujun raised multiple suggestions regarding Taiwan’s crypto industry, and the Executive Yuan and the FSC responded.

Executive Yuan-led research to evaluate VASP tax incentives

To enhance Taiwan’s international competitiveness in the virtual asset sector, Ge Rujun strongly recommended developing industry-specific tax incentives.

He cited policies from countries such as Thailand, El Salvador, and Germany, proposing that Taiwan consider exempting value-added tax (VAT) until 2035, or granting a five-year corporate tax exemption to lawful and compliant operators.

Finance Minister Chuang Cui-yun responded that the existing tax system and incentives can be applied first; if new, dedicated incentives are to be added, a tax expenditure assessment is still required.

Su Tseng-chang agreed that this concept is consistent with the spirit of the Industry Innovation Act. On the spot, he promised that the Executive Yuan would lead and task the Ministry of Finance together with the FSC to conduct research and, within one month, submit the broad direction for the tax incentives.

Retail investors need to wait for a Bitcoin ETF report; stock tokenization is unlikely to go live in the short term

Ge Rujun also urged the FSC to expand access to Bitcoin ETFs and stock tokenization businesses.

He emphasized that the United States, Canada, and Hong Kong have all approved spot Bitcoin ETFs. Taiwan currently restricts participation to professional investors delegating overseas products, which could potentially trigger capital outflows.

In response, Peng Jin-long said that regarding opening up to the public delegated purchases of overseas virtual-asset ETFs, once the securities firms’ association evaluation report is received and it is confirmed that the scope can be expanded, they will explain externally in the near term; as for issuance within Taiwan, it must coordinate with the legislative progress of the Virtual Assets Service Act, with a report expected to be submitted within three months.

In addition, for stock tokenization, because infrastructure still needs to be built, it cannot be launched immediately in the short term.

• **Related report:****Can retail investors buy overseas crypto ETFs? FSC: Will evaluate after receiving the report whether delegated purchase will be opened.

Czech Bitcoin is a pilot program and is not included in foreign-exchange reserves

Ge Rujun again put forward suggestions regarding virtual-asset strategic reserves, such as Bitcoin and stablecoins, and believes the central bank should evaluate whether to convert a very small proportion of foreign-exchange reserves into stablecoins or tokenized bonds.

Su Tseng-chang responded that currently, no country has a case of listing Bitcoin as part of foreign-exchange reserves. Ge Rujun then added that the Czech Republic has begun purchasing, and more countries are studying it.

However, in fact, the Czech Republic has not included Bitcoin as part of foreign-exchange reserves; instead, it has included it in an investment portfolio pilot.

Last November, the Czech central bank announced plans to build a $1 million investment portfolio, allocating Bitcoin, USD stablecoins, and tokenized deposits on blockchain—an action that had drawn questions from European Central Bank President Christine Lagarde.

An official statement from the Czech central bank said that the portfolio is purely an experimental plan to set up a blockchain-based digital-asset investment portfolio, with the purpose of testing digital-asset management processes.

The Czech central bank has strictly separated the test assets from international reserves, and clearly emphasized that purchasing Bitcoin does not mean including it in foreign-exchange reserves; its price volatility does not in any way affect the central bank’s ability to carry out foreign-exchange interventions.

• **Related report:****Not reserves! Czech central bank’s first Bitcoin purchase—an experiment with a million-dollar crypto investment portfolio.