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

Legislators propose providing tax incentives for VASP, establishing an education fund, and expanding Bitcoin ETF offerings. The Executive Yuan and the Financial Supervisory Commission promise to submit related research reports within a month, and the expansion of delegated overseas crypto ETF purchases will be explained publicly in the near future.

Legislators propose tax incentives for VASP and issuing Bitcoin ETFs

Legislator Ge Rujun stated during the plenary inquiry yesterday (4/28) that he made several suggestions for Taiwan’s crypto industry, including expanding dedicated personnel, establishing an education fund, offering tax incentives for virtual asset service providers (VASP), expanding Bitcoin ETF and stock tokenization, and researching virtual asset strategic reserves, among others.

Premier Su Rong-tyai promised support for organizational review, and Deputy Chairperson Peng Jinlong of the FSC stated that multiple proposals would be submitted for related research reports within a month.

Virtual Asset Education Fund Still Needs Evaluation

Taiwan’s first compliant VASP operators have been established, and the draft Virtual Asset Service Law has been sent to the Legislative Yuan. Cryptocurrency is expected to advance into the public eye in a more compliant manner, but related fraud prevention awareness and investment education are still inadequate.

In response, Ge Rujun proposed establishing a “Virtual Asset Education Fund,” suggesting a joint funding model by the government and industry, such as each contributing 100 million yuan to jointly establish the fund.

Peng Jinlong responded that, after reviewing foreign systems, most are based on voluntary industry resource input, and there is currently no government co-funded financial safety net design.

However, he also promised that the FSC would further compile international practices and other feasible alternatives, and provide a detailed research report within a month.

Image source: Video footage of Legislator Ge Rujun’s plenary inquiry. During the inquiry yesterday (4/28), legislator Ge Rujun made multiple suggestions for Taiwan’s crypto industry, and the Executive Yuan and FSC responded.

Executive Yuan-led review, evaluating 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 Thailand, El Salvador, and Germany, proposing Taiwan consider exempting value-added tax until 2035 or granting a five-year corporate tax exemption to compliant and legitimate industry players.

Minister of Finance Chuang Cui-yun responded that the existing tax system and incentives can be applied for now, but any new industry-specific incentives would require a tax expenditure assessment.

Su Rong-tyai agreed that this concept aligns with the Industry Innovation Act and promised that the Executive Yuan would lead the effort, instructing the Ministry of Finance and the FSC to research and propose the main directions for tax incentives within a month.

Retail investors waiting for ETF report; stock tokenization unlikely to launch soon

Ge Rujun also urged the FSC to expand the opening of Bitcoin ETFs and stock tokenization services.

He emphasized that the U.S., Canada, and Hong Kong have all approved spot Bitcoin ETFs, while Taiwan currently only allows professional investors to delegate overseas products, which could trigger capital outflows.

Peng Jinlong responded that regarding allowing the public to delegate overseas virtual asset ETFs, once the securities association’s evaluation report is received and if expansion is confirmed feasible, an announcement will be made soon; for domestic issuance, it must align with the legislative progress of the Virtual Asset Service Law, with a report expected within three months.

Additionally, due to the need to build infrastructure, stock tokenization is not expected to go online in the short term.

• Related report:** Can retail investors buy overseas crypto ETFs? FSC: Will evaluate whether to open delegated purchases after receiving the report.**

Czech Republic’s Bitcoin is an experimental project, not included in foreign exchange reserves

Ge Rujun again proposed the idea of using virtual assets like Bitcoin and stablecoins as strategic reserves, suggesting that the central bank evaluate whether to convert a tiny portion of foreign exchange reserves into stablecoins or tokenized bonds.

Su Rong-tyai responded that no country has yet included Bitcoin as part of its foreign exchange reserves, and Ge Rujun added that the Czech Republic has started purchasing, with more countries considering similar measures.

In fact, the Czech Republic has not officially included Bitcoin in its foreign exchange reserves but has incorporated it into an experimental investment portfolio.

In November last year, the Czech National Bank announced the creation of a $1 million investment portfolio, including Bitcoin, USD stablecoins, and tokenized deposits on blockchain, which drew skepticism from European Central Bank President Christine Lagarde.

The Czech National Bank’s official statement clarified that this investment portfolio was purely an experimental project to test digital asset management processes.

The Czech National Bank has strictly separated this test asset from international reserves, emphasizing that purchasing Bitcoin does not include it in foreign exchange reserves, and its price volatility does not affect the bank’s ability to intervene in foreign exchange markets.

• Related report:** Not reserves! Czech National Bank’s first Bitcoin purchase, experimenting with a million-dollar crypto investment portfolio.**