Taiwan's Financial Supervisory Commission (FSC) plans to launch a pilot project in 2025 to allow local banks to offer cryptocurrency custody services. 3 institutions have already expressed interest, marking a turning point towards institutional adoption of digital assets in Asia.
Taiwanese banks set to adopt Bitcoin and cryptocurrencies
In 2024, many companies and institutions around the world have started or continued to adopt Bitcoin and cryptocurrencies. First through equity funds, such as Tesla and MicroStrategy, then through spot Bitcoin ETFs, integrated into the portfolios of many institutions, notably in the State of Michigan retirement fund.
In Asia, institutional and professional adoption is more timid, but far from non-existent. Earlier this year, South Korea's major political parties made cryptocurrency regulation a campaign issue. In addition, spot Bitcoin and Ethereum ETFs were launched in Hong Kong, while the Japanese company MetaPlanet acquired several million dollars in BTC.
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The Financial Supervisory Commission (FSC) of Taiwan, the equivalent of the Securities and Exchange Commission (SEC) in the United States, recently announced plans to launch a digital asset custody pilot project through Taiwanese banks.
This project is being implemented to encourage innovation in the financial sector. Interested institutions are invited to submit their application to the FSC. To date, 3 banks have already expressed their interest. The Commission anticipates that the first application could be submitted during the first quarter of 2025.
Furthermore, the FSC is working on a draft law, the publication of which is planned by the end of 2024, in order to define a clear framework for the development of cryptocurrencies, thus allowing the industry to develop more quickly and securely.
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Next steps before the pilot project is launched by the FSC
Hu Zehua, director of the FSC's general planning department, told a news conference that the commission will first seek public feedback for about 15 days before officially launching the pilot project.
The feedback collected will allow the FSC to better understand the opinions and needs of different stakeholders, and to adjust regulations accordingly.. According to Hu Zehua, applicant institutions will have to specify in advance which assets they wish to manage, whether BTC, ETH or other cryptocurrencies.
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Hu Zehua also clarified that some brokerage firms had shown interest, but the Commission preferred to direct them towards larger institutionsdue to their low capitalization, which could constitute a weakness in the implementation of cryptocurrency custody services.
The regulations that the FSC must also put in place to ensure compliance with laws against money laundering and the financing of terrorism. The institutions participating in the project will have to guarantee that the funds do not come from illicit activities.
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Source: CNA
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