The financial regulatory authority in Taiwan is said to be contemplating a trial for institutional cryptocurrency custody services, with evaluations of local banks for a pilot initiative.
Taiwan Aims to Incorporate Crypto Assets into Its Economy
The Financial Supervisory Commission (FSC) of Taiwan is reportedly urging local banks to implement trial digital asset custody services.
In the first quarter of 2025, the regulator intends to gather applications from financial institutions interested in testing digital asset custody services. Three banks have already indicated their willingness to join the pilot program.
Sources familiar with the situation suggest that institutions aiming to participate must specify the types of digital assets they wish to store, including Bitcoin (BTC), Ether (ETH), or Dogecoin (DOGE), among others.
With the industry currently surpassing $2.2 trillion in total market capitalization, several security-related guidelines that institutions must follow have been established.
For example, the participating institutions must outline their target demographics, which could include professional investors, general investors, digital asset firms, and more. They are also required to have a robust security infrastructure and implement measures to prevent money laundering.
Furthermore, these institutions must possess security protocols to ensure they do not interact with illegal digital asset sources. Non-compliance could lead to their cryptocurrency wallets being confiscated by government authorities.
As reported, Hu Zehua, the FSC Director, indicated that the regulator is contemplating releasing more details about the trial at least 15 days prior to accepting applications. Additionally, the FSC seeks public input regarding the proposed trial and plans to modify the process based on feedback.
Recent regulatory developments in Taiwan suggest that the nation is gradually embracing digital assets. Notably, on September 30, the FSC approved institutional investors to engage in foreign crypto exchange-traded funds (ETFs) through a re-entrustment process.
Crypto Landscape Maturing in Asia
Taiwan’s recent acceptance of digital assets underscores its growing importance as a formidable sector that enhances the national economic future. However, it is not the only Asian country adopting a favorable crypto approach.
Japan, a neighboring country, is reportedly reviewing its current regulations concerning digital assets, which may lead to reduced taxes on crypto profits and the sanctioning of ETFs.
The United Arab Emirates (UAE), another major player in the Asian crypto space, recently declared that all conversions and transfers of digital assets will be exempt from Value Added Tax (VAT). This initiative is viewed as an effort by the UAE’s financial regulators to attract cryptocurrency investments.
Nevertheless, financial regulators continue to harbor concerns regarding the potential risks that crypto assets pose to retail investors. A recent study revealed that nearly 70% of South Korean crypto exchanges were unable to return user funds following their closure. At present, BTC is trading at $62,303, reflecting a 0.1% decline in the last 24 hours.
Featured Image from Unsplash.com, Chart from TradingView.com
