Blockchain developers have voiced concerns about the government’s intention to develop distributed ledger technology, due to its past opposition and dominant hold on existing infrastructure.
Financial Information Service Co (FISC, 財金公司), which oversees the nation’s banking payment and settlement systems controlled by the central bank, has announced that its new blockchain platform would go online in July.
FISC said that its blockchain platform would prioritize the facilitation of charitable donations; improve customer data verification, lending and fundraising; and enable consumers to accrue credit card reward points across different issuing banks.
However, the government’s plans omit blockchain-based payment methods and the use of digital currencies such as bitcoin, blockchain developer AMIS (帳聯網路科技) CEO Alex Liu (劉世偉) said.
A report published on Monday by Chinese-language Credere Media (信傳媒) said that FISC chairwoman Chao Yang-ching (趙揚清) early this year had explicitly warned financial institution executives against pursuing new technologies, such as electronic wallets and blockchain, without FISC’s consent.
Liu said that he was surprised to learn of the extent of the government’s reservations, adding that AMIS is ready to test its own blockchain payment platform when a bill to introduce a “regulatory sandbox” to promote experimentation with new financial products and services is implemented.
FISC’s resistance to rival blockchain platforms is due to its hold on key infrastructure, which enables it to collect transaction fees on all interbank payments and fund transfers, the report said.
FISC and the government never intended to promote new technologies, which is reflected in the lackluster consumer adoption rate for T-Wallet, a homegrown mobile payment service developed by the central bank affiliate, the report quoted several bank managers as saying.
T-Wallet has squandered a two-year head start on foreign payment services such as Apple Pay and Samsung Pay, with consumers complaining about its poor user experience, the report said.
Taiwanese businesses and developers face not only regulatory hurdles, but also half-hearted efforts at innovation that yield few results, the bank managers said.
While FISC retains its hold on the nation’s 45 banks, the landscape has changed as more younger lawmakers across the blue-green divide have begun to support financial technology innovation, Liu said.
Taiwan could glean insights from Japan, where digital currencies are accepted by electronics retailer Bic Camera Inc and low-cost airline Peach Aviation, Liu said, adding that the Financial Supervisory Commission continues to debate how to regulate bitcoin as a payment tool and the Ministry of Finance remains unsure about how to tax transactions related to digital currencies.
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