Taiwan’s Financial Supervisory Commission (FSC) will launch its first virtual asset custody trials in early 2025, aiming to promote financial innovation and strengthen the secure management of digital assets. Three major banks have already expressed interest in offering custodial services for cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin.
The trials will initially focus on professional investors and virtual asset platforms, with the possibility of expanding these services to the general public. Financial institutions must specify the types of virtual assets they intend to manage. A 15-day public consultation period will precede the official acceptance of applications for participation in the trial.
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Security and Compliance at the Core of Taiwan’s Virtual Asset Trials
Security remains a top priority for the FSC, requiring banks to prevent virtual assets tied to illegal activities, such as money laundering, from entering their custody services. Banks must observe high standards of conduct to avoid holding assets from prohibited activities, thus reducing the incidence of seized digital wallets.
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Besides the trials, new legislation should also be initiated by the FSC by the end of 2024. This will go a long way in offering concrete measures for compliance and well-being of financial institutions as they engage in virtual assets management. Again, Taiwan has followed practices within global jurisdictions whereby banks focus their services on exchanges and professionals before extending to the public domain.
Conclusion
Taiwan’s virtual asset custody trials, commencing in 2025, represent a vital step toward securely institutionalizing digital assets within the nation’s financial ecosystem. The FSC emphasizes that compliance and security serve as essential precursors to innovation, enabling the organization to gradually establish a robust foundation for the burgeoning digital asset landscape. This careful approach aims to foster trust and facilitate the responsible growth of the virtual asset market.
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Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.