Private Banks in Taiwan Seek to Explore Virtual Asset Custody Business, FSC Shows Support

Certain securities companies have also reportedly shown interest in exploring this business avenue.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 9 October 2024 19:10 IST

Private Banks in Taiwan Seek to Explore Virtual Asset Custody Business, FSC Shows Support

Photo Credit: Unsplash/ Roméo A

In recent years, Taiwan has emerged as a hub for large scale crypto events

Highlights

Taiwan does not recognise cryptocurrencies as legal tender
Virtual assets like BTC, ETH are available as investment options
Crypto trading is permitted in Taiwan

Taiwan's Financial Supervisory Commission (FSC) is exploring ways to integrate Web3 services into its financial ecosystem. At a recent press conference, FSC official Hu Zehua stated that the regulatory body is open to involving financial institutions in trials for virtual asset custody services. This move follows growing interest from private lenders in recent months, with some securities firms also reportedly expressing interest in entering this space.

In Taiwan, the Financial Supervisory Commission (FSC) regulates the virtual assets industry. By the end of this year, the FSC plans to finalise a draft of a new law that will outline compliance requirements for financial institutions interested in participating in these trials, Taiwanese publication CNA reported.

According to a CNA report, Bitcoin, Ether, and Dogecoin have been identified as the virtual assets selected for upcoming custody service trials. Financial institutions involved will have the option to offer these services to various groups, including virtual asset platforms, retail investors, or professional investors.

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According to Hu Zehua, the FSC is expected to begin accepting applications for virtual asset custody trials in the first quarter of 2025, between January and March. Zehua also disclosed that three private banks have already expressed interest in participating.

The FSC aims to ensure that all crypto custody businesses in Taiwan implement and maintain the highest security standards. Zehua emphasised that platforms entering the virtual asset custody sector must be capable of identifying and blocking transactions from suspicious accounts, or they risk having their wallets seized.

The CNA report also noted that these trials are limited to banks only, with little chance of being extended to individual investors.

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Recently, Taiwan has emerged as a hub for large scale crypto events like the Taipei Blockchain Week. The digital assets market in Taiwan, Statista projects, is likely to grow by 7.74 percent between 2024-2028, resulting in a market volume of $3,391 million (roughly Rs. 28,474 crore) by 2028.

In June of this year, Taiwanese government officials joined forces with local crypto companies to establish the Taiwan Crypto Blockchain Self-Regulatory Organization (TCBSRO). This body aims to implement industry standards to help refine and regulate the country's crypto sector.

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Further reading: Cryptocurrency, Taiwan, FSC, Hu Zehua, Crypto Custody Business

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More