Taiwan Financial Supervisory Commission (FSC) is starting a trial for crypto asset custody to encourage innovation in finance. So far, three private banks want to join the trial. The first applications should be submitted in the first quarter of next year.
The FSC started this initiative due to rising interest in digital assets. The goal is to create a structured environment. This will encourage financial institutions to explore this new sector. The commission plans to introduce a draft special law by the end of this year. This will clarify compliance requirements. It will also provide a roadmap for industry development.
Public consultation on Taiwan’s crypto custody plans
At a recent press conference, the director of the Comprehensive Planning Division at the FSC, Hu Zehua, said they will have a 15-day public feedback period. This lets outside people give comments before the custody service trial starts. The FSC wants to use this input to improve its plan.
The FSC is looking at virtual asset exchanges and institutional investors as potential clients for banks. Some securities firms showed interest, but the FSC focused on banks with more resources due to concerns over capital limits. Hu stressed the need for security in the custody business, as it may involve large amounts of virtual currency.
The FSC also focuses on stopping money laundering. They require financial institutions to block any virtual assets linked to illegal activities. Institutions must explain the digital assets they plan to manage. This includes well-known cryptocurrencies like Bitcoin, Ethereum, and Dogecoin. They must also describe their target clients. This could range from exchanges to professional and retail investors.
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