Taiwan’s FSC Launches Bank-Led Crypto Custody Trial

• Taiwan’s FSC initiates a trial for banks to manage digital assets, enhancing financial innovation.
• The trial includes strict security and anti-money laundering measures to protect all involved.
• New regulations require crypto firms to register by 2025 or face severe penalties.

Taiwan’s Financial Supervisory Commission (FSC) has plans to start a trial for banks to manage digital assets, aiming to boost financial innovation. The trial is set to start in the first quarter of next year and invites local banks to join in.

Three banks have already shown interest in this trial. The program is designed to serve not only digital asset exchanges but also professional investors, expanding traditional banking services.

Hu Zehua, director at the FSC, discussed the plan at a press conference. He explained that the FSC would share detailed plans with the public for 15 days to get feedback before officially taking applications from banks. This feedback will help refine the trial’s rules.

The trial will focus on how to safely manage digital currencies like Bitcoin, Ethereum, and Dogecoin. The FSC emphasizes the need for strong security to protect against theft and strict measures to prevent money laundering, ensuring that all managed digital assets are from legal sources.

A new law expected by the end of this year will set clear rules and help the digital asset industry grow. This will make it easier for banks to get involved in this new area. At first, these services will be for digital asset exchanges. Later, they may open up to professional investors after confirming the security setup is strong. Offering these services to regular investors is still considered uncommon, showing a careful approach to these new bank services.

This initiative by the FSC is a big step for Taiwan’s finance sector, putting it at the forefront of financial technology and innovation. Further solidifying its commitment to secure and regulated growth, the FSC has introduced stringent Anti-Money Laundering (AML) regulations that all virtual asset service providers (VASPs) must comply with by 2025. 

With a clear directive for crypto firms to register by September 2025, Taiwan is tightening oversight to ensure a legally compliant crypto environment. Companies that fail to register may face hefty fines up to 5 million Taiwan dollars ($155,900) and up to two years in prison, signaling the FSC’s resolve to enforce these regulations rigorously.