Close
Bitcoin Blockchain Technology Business Cryptocurrency Digital Assets Financial Markets Fintech Global Markets Government

Taiwan to Pilot Institutional Crypto Custody Through Local Banks in 2025

In a move that would advance cryptocurrency adoption, Taiwan is preparing to launch an institutional trial for crypto custody services through local banks, marking a pivotal step in integrating digital

Taiwan to Pilot Institutional Crypto Custody Through Local Banks in 2025
  • PublishedOctober 10, 2024

In a move that would advance cryptocurrency adoption, Taiwan is preparing to launch an institutional trial for crypto custody services through local banks, marking a pivotal step in integrating digital assets into the nation’s financial infrastructure. The Financial Supervisory Commission (FSC) of Taiwan announced that applications for the pilot program will open in the first quarter of 2025, with three private banks already expressing interest in participating.

This development underscores Taiwan’s commitment to fostering a regulated and secure environment for cryptocurrency storage, a key concern for institutions globally as they seek to offer digital asset services to clients. According to local reports, financial institutions wishing to partake in the trial will need to outline the types of assets they plan to store—such as Bitcoin, Ether, or Dogecoin and the target users for their services, which could range from professional and general investors to cryptocurrency platforms.

At a press conference, Hu Zehua, director of the FSC’s comprehensive planning division, emphasized that the trial’s details will be released at least 15 days before applications open. Additionally, the FSC will gather public feedback to refine the process, further indicating the regulator’s effort to balance innovation with security in the nascent cryptocurrency space.

Taiwan’s Growing Involvement in Cryptocurrency

The institutional crypto custody trial is just one of several steps Taiwan’s government is taking to solidify its position as a leading financial innovator in Asia. Earlier this month, the FSC updated Taiwan’s Anti-Money Laundering framework to include provisions for cryptocurrency use, requiring all crypto companies to register with the government by September 2025. Failure to comply could result in severe penalties, including fines of up to $156,000 or prison sentences of up to two years.

Additionally, in a move aimed at enhancing market competitiveness, the FSC recently authorized professional investors to engage with foreign cryptocurrency exchange-traded funds (ETFs), further opening Taiwan’s financial sector to digital asset investment.

The Rise of Crypto Custody and Global Adoption

While Taiwan’s proactive stance on cryptocurrency regulation sets it apart, this is part of a larger trend of growing global crypto adoption, particularly in regions that are looking to position themselves as hubs for financial innovation. Layer-1 blockchains like Solana, Avalanche, Pecu Novus, XRP, and Cardano are likely to play a significant role in Taiwan’s crypto landscape as these platforms offer scalability, speed, and security, key considerations for financial institutions looking to store and manage digital assets for clients.

As Taiwan inches closer to formal crypto regulation and institutional involvement, the potential for new financial products and services grows, signaling a broader acceptance of digital assets beyond just Bitcoin. For financial institutions, the opportunity to become custodians of digital assets represents a new frontier in wealth management, enabling them to offer secure storage and investment options to a diverse range of clients.

Strategic Opportunity Amidst Regional Dynamics

Taiwan’s move toward institutional crypto adoption comes at a time when its neighbor, mainland China, continues to crack down on cryptocurrency transactions, having banned all forms of digital asset trading in 2021. This divergence creates a unique opportunity for Taiwan to emerge as a regional leader in crypto innovation, attracting both domestic and international players seeking a regulated, crypto-friendly environment.

With the likes of Pecu Novus, Solana, Avalanche, and others poised to offer solutions for secure custody and efficient transaction processing, Taiwan’s financial institutions could soon be offering comprehensive crypto services, making the country a focal point for crypto-driven financial innovation in Asia.

A Broader Vision for the Future

The FSC’s initiative to pilot crypto custody services through local banks is expected to pave the way for broader institutional adoption of cryptocurrencies across the country. With global demand for secure, regulated digital asset storage services on the rise, Taiwan’s early move into this space positions it well to capitalize on the future of finance.

As cryptocurrency continues to mature, with major institutions stepping in, the world will see a broader range of digital assets managed and stored by trusted financial players, ushering in a new era of secure, scalable, and compliant digital finance. Taiwan’s forward-thinking approach, rooted in regulatory clarity and innovation, could set a precedent for other nations to follow.

The pilot program for crypto custody in Taiwan could very well be the catalyst that accelerates institutional crypto adoption on a global scale.

Thomas Lin
Digital Assets Desk