Taiwan's FSC to Launch Institutional Trial for Crypto Custody Services

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2024-10-09 06:00:35

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Three private banks have already expressed interest in participating in this pilot program. Last updated:

October 9, 2024 10:00 EDT

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto…

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Last updated:

October 9, 2024 10:00 EDT

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The FSC intends to begin accepting applications for the trial in the first quarter of 2025, according to a report by the Central News Agency on October 8.

Three private banks have already expressed interest in participating in this pilot program.

Banks Need to Clarify Cryptos They Plan to Manage

Financial institutions interested in the trial will need to specify the types of assets they plan to manage, including popular cryptocurrencies like Bitcoin, Ether, and Dogecoin.

Additionally, banks must outline their target client base, such as professional or general investors, crypto platforms, or other institutional players.

This approach ensures that banks have a clear understanding of the market segment they aim to serve.

Hu Zehua, FSC’s director of the comprehensive planning division, told the outlet that details about the trial would be made public at least 15 days before the application process begins.

The FSC also plans to gather public feedback and incorporate suggestions to refine the trial process.

Taiwan to Trial Crypto Custody Services in 2025

Taiwan’s Financial Supervisory Commission will start collecting applications for crypto custody services in Q1 2025, with interest from three local banks. pic.twitter.com/CovKd3ZtkY

— mracrypto (@MRA_crypto) October 9, 2024

The initiative comes on the heels of updated Anti-Money Laundering (AML) regulations introduced by Taiwan’s FSC.

The new rules focus on improving oversight of local virtual asset service providers (VASPs), reinforcing the regulatory framework to support a safer and more transparent crypto market.

Back in May, Taiwan authorities announced that they intend to punish cryptocurrency firms that fail to abide by its AML laws.

In response to fraud and money laundering risks in the virtual asset landscape, Taiwan’s Ministry of Justice proposed several amendments to the city’s existing AML laws, suggesting hefty fines and prison terms for non-compliant service providers.

Key components of the proposed amendments include regulations targeting fraud prevention, money laundering prevention, technology investigation and security, and communications security and supervision.

Notably, a major change in the new money laundering prevention law targeting VASPs outlines harsher penalties for noncompliance.

The revised law introduces stricter registration requirements and limitations for domestic and international currency dealers.

Taiwan Pushes for Crypto Regulations

Taiwan has been pushing for crypto regulations amid efforts to establish itself as a global cryptocurrency hub.

The country is set to impose restrictions on offshore cryptocurrency exchanges operating within its jurisdiction unless they gain the required registration.

In September last year, the country’s FSC drafted ten guiding principles for VASPs to establish self-regulatory rules.

The guiding principles, expected to be officially released by the end of this month, will focus on various aspects.

More specifically, the guidelines are expected to strengthen information disclosure, establish review standards for virtual asset listing and delisting, and ensure the separation and custody of companies’ and customers’ assets.

The FSC plans to strictly prohibit illegal business solicitation by foreign crypto firms.

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