Taiwan is spearheading digital asset custody by initiating trials for institutions in the jurisdiction. The Taiwanese Financial Supervision Commission expressed plans to kick-start tests on the crypto custody business. Three entities have already expressed interest in the trials.
Virtual asset custody may soon be a business venture for financial institutions in Taiwan. The Taiwanese Financial Supervision Commission announced a test program for institutions to participate in digital asset custody.
According to the announcement, the tests will commence early next year, and three banking institutions have already expressed their interest in participating in the tests.
FSC to establish clear regulations on crypto custody in Taiwan
According to a local media outlet, the Financial Supervisory Commission (FSC) oversees the digital asset ecology in Taiwan and intends to establish a draft containing regulations governing the industry.
The government body aims to provide clear laws that simplify compliance for digital asset operations and allow for future amendments and improvements. The local news site reported that the organization will involve institutional players to champion the custody tests and pilot the business venture.
Director of the Comprehensive Planning Division of the Financial Supervisory Commission, Hu Zehua, spoke at a press conference on October 8th on the issue. The director mentioned that the Financial Supervisory Commission will publicly explain the plan to encourage external opinions for 15 days.
The director also noted that after the duration elapses, the organization will formally begin accepting applications from financial institutions for the trial operation that is inclined toward the virtual asset custody business.
During the application process, the FSC will require applicant institutions to specify the type of crypto asset they intend to keep. The application will also be obliged to explain the service targets of the virtual asset custody business, like crypto platforms, to general investors or professional investors. The external views and opinions will be collected, compiled, and analyzed. Any valid external opinion or proposal will prompt subsequent revisions and be implemented.
The organization has not given any dates for the commencement of the process so far. However, the local news outlet reported that the organization will announce the application dates soon, but the first application may be filled early next year.
Small Taiwanese security companies proposed crypto custody first
Hu Zehua stated in the press conference that interests began surfacing among small securities companies but were limited by their liquidity and capital. He also highlighted that players involved in the crypto asset custody business value security due to the large amount involved in the businesses.
According to Hu Zehua, foreign banks typically service crypto exchanges first. The FSC will allow professional investors to participate in the custody firm once it has been operating for some time and has earned the FSC’s confidence. He also added that it is uncommon for regular investors to be included in the service targets.
The Taiwanese government has been active in the digital asset landscape. The news comes after the FSC introduced new anti-money laundering laws regarding digital assets like Bitcoin. The new regulations obliged all crypto organizations and companies operating in the Taiwan jurisdiction to register with the government before 2025.
