Strive to build a digital asset hub! Ge Rujun said: A domestic launch of Bitcoin ETFs and VASP tax incentives

Author: Ariel, Crypto City

Legislator Proposes VASP Tax Incentives and Bitcoin ETF Legislator Ge Rujun on April 28 during the general inquiry, made several suggestions for Taiwan’s crypto industry, including expanding dedicated personnel, establishing an education fund, providing tax incentives for virtual asset service providers (VASP), expanding the opening of Bitcoin ETFs and tokenization of stocks, and studying virtual asset strategic reserves, etc. Premier Su Tseng-chang promised support for organizational review, and Minister of Finance Peng Jin-long stated that several proposals would be presented in a related research report in one month.

Virtual Asset Education Fund Still Needs Evaluation Taiwan’s first compliant VASP operators have been announced, and the draft of the “Virtual Asset Service Law” has been sent to the Legislative Yuan. Cryptocurrency is expected to advance to the public’s view in a more compliant manner in the future, but related fraud prevention awareness and investment education are still inadequate. In response, Ge Rujun proposed establishing a “Virtual Asset Education Fund,” and suggested a co-investment model between the government and industry players, such as each side contributing 100 million yuan to jointly establish it. Peng Jin-long responded that after referencing foreign systems, the Financial Supervisory Commission (FSC) found that most are voluntarily invested by industry players, and there is currently no financial safety net design involving government co-investment. However, he also promised that the FSC would further compile specific international practices and other feasible alternatives, and provide a detailed research report within a month.

Image source: Ge Rujun’s general inquiry video screen ｜ During the general inquiry, Ge Rujun made several suggestions for Taiwan’s crypto industry, with responses from the Executive Yuan and the FSC.

Executive Yuan Leads Research, Evaluates 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 that Taiwan consider exempting value-added tax until 2035, or granting a five-year corporate tax exemption to compliant legal operators. Minister of Finance Chuang Cui-yun responded that the existing tax system and incentives can be applied first, and any new special incentives would require a tax expenditure assessment. Su Tseng-chang agreed that this concept aligns with the Industry Innovation Act, and immediately promised that the Executive Yuan would lead and instruct the Ministry of Finance and the FSC to research and propose the main direction of tax incentives within a month.

Retail Investors Waiting for Bitcoin ETF Report, Stock Tokenization Difficult to Launch Short-term Ge Rujun also urged the FSC to expand the opening of Bitcoin ETFs and stock tokenization services. He emphasized that the US, Canada, and Hong Kong have all approved spot Bitcoin ETFs, while Taiwan currently only allows professional investors to entrust overseas products, which may trigger capital outflows. Peng Jin-long responded that regarding opening the public to entrust overseas virtual asset ETFs, once the securities association’s evaluation report confirms feasibility, they will announce it soon; for domestic issuance, it depends on the progress of the “Virtual Asset Service Law” legislation, and a report will be submitted within three months. Additionally, due to the need to build infrastructure, stock tokenization cannot be launched immediately in the short term.

• Related report: Retail investors to buy Bitcoin ETFs via entrusted trading? FSC hints: Under evaluation

Czech Republic’s Bitcoin as 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 Tseng-chang responded that no country has yet listed Bitcoin as part of its foreign exchange reserves, but Ge Rujun added that the Czech Republic has started purchasing, and more countries are studying it. However, in fact, the Czech Republic has not included Bitcoin in its foreign exchange reserves but has incorporated it into an investment portfolio experiment. In November last year, the Czech Central 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 Central Bank’s official statement clarified that this investment portfolio is purely an experimental project to establish a blockchain digital asset investment portfolio, aimed at testing digital asset management processes. The Czech Central 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 fluctuations do not affect the central bank’s ability to intervene in foreign exchange.

• Related report: The world’s first central bank move! Czech National Bank announces “has purchased Bitcoin”