Taiwan’s Financial Supervisory Commission (FSC) is set to launch a pilot program for institutions interested in digital asset custody services. This initiative is part of the country’s broader efforts to foster financial innovation within the digital asset industry. The program aims to introduce comprehensive legislation for digital assets by the end of 2024, with three banks already expressing interest in participating in the pilot program starting in early 2025.
The FSC will encourage financial institutions to join the program, allowing them to securely safeguard digital assets such as cryptocurrencies for clients. Director Hu Zehua outlined the process during a press conference, stating that the FSC will open a 15-day consultation period to gather public input. After review, the regulator will announce when applications can begin. Three private banks have already shown interest in offering custody services for virtual asset exchanges and institutional investors, with security being a top priority.
Ensuring the safety of digital asset custody is crucial for the FSC. Institutions handling virtual currencies must implement robust safeguards due to the potentially large sums involved. Strong anti-money laundering protocols will also be enforced to prevent illegal funds from entering the system and reduce the risk of asset seizures. Financial institutions interested in the pilot program will need to specify which virtual assets they plan to manage and outline their target clientele, which could include virtual asset platforms, professional investors, or retail clients.
Internationally, banks typically focus on serving virtual asset exchanges first before expanding to institutional investors once security measures are proven reliable. Retail investors usually do not receive such services initially. Taiwan’s support for virtual asset services demonstrates the government’s commitment to financial innovation while ensuring safety and regulatory standards remain a top priority. The move aligns with the country’s goal of becoming a hub for digital asset innovation while maintaining a secure and regulated environment.
