A few companies have issued utility tokens recently, but they cannot promise returns or claim to be investment vehicles, the Financial Supervisory Commission (FSC) said yesterday.
“We will investigate whether these digital tokens are utility tokens or securities tokens in disguise,” Securities and Futures Bureau Deputy Director-General Tsai Li-ling (蔡麗玲) told the Taipei Times by telephone.
Utility tokens can only be exchanged for the issuer’s products or services, Tsai said.
However, some issuers seemed to imply that their tokens could generate returns on investment, she said.
“Utility tokens should be different from securities tokens, so we do not want to see issuers cross the line,” Tsai said.
The commission does not have rigid regulations for utility tokens, viewing the trade as similar to that of normal goods, Tsai said, adding that the commission is mulling subjecting them to the rules for securities tokens.
Her remarks came after electronic voucher issuer Mohist Web Technology Co (墨攻網路科技) and pet care service provider PetTalk Inc (寵聚) last week announced utility tokens valued at NT$10 and US$0.06 respectively.
They are to be traded on local exchanges later this year.
“It is difficult to forecast whether prices will go up or down, as there is no clear indication of supply and demand at the moment,” BitAsset Exchange director Martin Yeh (葉佳彥) said last week.
“However, we are sure that prices will be volatile, tracking with the issuers’ business performance,” Yeh said.
PetTalk’s utility tokens are to be traded on BitAsset.
BiTiffany Universal Inc (幣鑽環球), which helped launch PetTalk’s tokens, forecast prices would hit US$1 on the back of the company’s increased business, cofounder Chevy Yang (楊秋霞) said.
“We will control the number of Pet Tokens in the market. If needed, we will buy back some and destroy them to prevent prices from falling,” Yang said.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
Gudeng Precision Industrial Co (家登精密), the sole extreme ultraviolet pod supplier to Taiwan Semiconductor Manufacturing Co (台積電), yesterday said it has trimmed its revenue growth target for this year as US tariffs are likely to depress customer demand and weigh on the whole supply chain. Gudeng’s remarks came after the US on Monday notified 14 countries, including Japan and South Korea, of new tariff rates that are set to take effect on Aug. 1. Taiwan is still negotiating for a rate lower than the 32 percent “reciprocal” tariffs announced by the US in April, which it later postponed to today. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud