Taiwan is set to take a major step toward institutional cryptocurrency adoption with plans to pilot crypto custody services through local banks beginning in 2025. The Financial Supervisory Commission (FSC), Taiwan’s primary financial regulator, announced that it will start accepting applications from financial institutions in the first quarter of 2025 to trial crypto custody services. This move is aimed at improving the infrastructure for digital asset storage and expanding Taiwan’s role in the global crypto market.
Key Details of the Trial
- Assets Covered: The trial will focus on well-known cryptocurrencies, including Bitcoin (BTC), Ether (ETH), and Dogecoin (DOGE). Financial institutions applying for the trial must specify which assets they intend to store for clients.
- Target Users: Institutions will also need to clarify whether they intend to serve professional investors, general investors, or crypto asset platforms. This will help regulators understand the scope of services provided and tailor their oversight accordingly.
- Regulatory Process: The FSC will make more information available about the trial at least 15 days before accepting applications. Public feedback will also be considered, and the process may be revised based on the feedback received.
A Step Toward Mainstream Adoption
The trial is a significant development for Taiwan as it seeks to build a regulatory framework around crypto assets. By allowing financial institutions to pilot crypto custody services, Taiwan is positioning itself as a potential global crypto hub, expanding its influence in the digital asset space. The country’s active engagement with crypto also contrasts with its neighbor, China, which has implemented a strict crackdown on cryptocurrency activity.
This initiative comes as Taiwan’s FSC has been updating its regulations to address emerging trends in the crypto industry. For example, in early October 2023, the FSC revised Taiwan’s Anti-Money Laundering (AML) framework to include specific provisions for cryptocurrency. The new rules require all crypto businesses to register with the government by September 2025, or face significant penalties, including fines and prison terms.
Growing Interest from Local Banks
At least three private banks in Taiwan have already expressed interest in participating in the crypto custody trial. The FSC’s approval of this trial could mark an important milestone in Taiwan’s regulatory approach, enabling financial institutions to integrate digital assets into their offerings safely and securely.
Taiwan’s Emerging Role in Crypto
Despite not recognizing cryptocurrency as legal tender, Taiwan has shown itself to be a forward-thinking market in terms of cryptocurrency adoption and regulation. Its proactive stance, including regulatory clarity for crypto-related activities, has made it one of the most promising markets for digital assets in Asia.
Broader Impact on Crypto Ecosystem
This move aligns with Taiwan’s broader strategy to enhance its financial competitiveness. Just a month earlier, the FSC authorized professional investors to engage with foreign cryptocurrency exchange-traded funds (ETFs). Taiwan’s focus on innovation within the crypto sector, combined with regulatory clarity, has positioned it as one of the leading crypto-friendly regions in the world.
As Taiwan steps up its crypto initiatives, the country could soon become a key player in the global cryptocurrency ecosystem, offering robust infrastructure and clear regulations for digital asset storage and investment.
