Taiwan FSC seeks public input ahead of 2025 launch for crypto custody services with local banks.
Taiwan FSC Plans to Launch Crypto Custody Pilot in 2025
Taiwan’s Financial Supervisory Commission (FSC) is preparing to implement a pilot program for institutional crypto custody services. The initiative aims to collect applications from interested banks in early 2025, signaling a significant step toward institutional crypto adoption in the region.
Institutions to Define Custody Parameters
According to local media reports, institutions involved in the pilot must outline the types of virtual assets they will manage, such as Bitcoin or Ethereum. Additionally, they need to clarify whether their services cater to platforms, professional investors, high-net-worth entities, or the general public.
Focus on Banks for Custody Services
During a recent press conference, Hu Zehua, the FSC’s Director of Comprehensive Planning, emphasized the importance of banks in this initiative. He argued that banks, due to their extensive capital reserves and security capabilities, are more suitable than security firms for managing crypto custody services.
Public Consultation Ahead of Pilot Launch
The FSC plans to conduct a 15-day public consultation prior to accepting applications for the custody services trial. This consultation will allow the agency to present proposed guidelines and gather external feedback, which will help refine the program before its official launch.
Taiwan’s Growing Interest in Crypto
This development reflects the Taiwanese government’s intensified focus on cryptocurrency. Recently, the FSC permitted professional investors to invest in foreign crypto exchange-traded funds (ETFs) through local brokers, enhancing access to crypto investments for qualified investors.
Updated AML Regulations for Crypto Firms
The FSC also revised its Anti-Money Laundering (AML) regulations last week to improve oversight of local virtual asset service providers (VASPs). These new regulations, effective January 1, 2025, mandate that all crypto firms register with the government by September 2025, with non-compliance resulting in significant penalties.
Penalties for Non-Compliance
According to CryptoPotato, failing to meet these new requirements could lead to up to two years in prison or fines reaching 5 million New Taiwan dollars (about $155,900). Although AML regulations have existed since July 2021, all crypto companies, including those already compliant, must re-register with the agency to avoid repercussions.
Implications for Taiwan’s Crypto Market
The introduction of the crypto custody pilot and updated regulations reflects Taiwan’s commitment to establishing a secure framework for digital assets. As local banks prepare to participate, the FSC’s initiatives may enhance investor confidence and attract further institutional involvement in the cryptocurrency market.
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