Taiwan’s Financial Supervisory Commission (FSC) is exploring ways to integrate Web3 services into its financial ecosystem. At a recent press conference, FSC official Hu Zehua said the regulatory body is open to involving financial institutions in trials of virtual asset custody services. The move follows growing interest from private lenders in recent months, with some securities firms also reportedly expressing interest in entering the space.

In Taiwan, the Financial Supervisory Commission (FSC) regulates the virtual asset industry. By the end of this year, the FSC plans to finalize a draft of a new law that will outline compliance requirements for financial institutions interested in participating in these trials, Taiwanese publication CNA reported.

According to the CNA report, Bitcoin, Ether and Dogecoin have been identified as the virtual assets selected for the upcoming trials of the custody service. Participating financial institutions will have the option to offer these services to different groups, including virtual asset platforms, retail investors or professional investors.

According to Hu Zehua, the FSC is expected to start accepting applications for virtual asset custody trials in the first quarter of 2025, between January and March. Zehua also revealed that three private banks have already expressed interest in participating.

The FSC aims to ensure that all crypto custodian companies in Taiwan implement and maintain the highest security standards. Zehua stressed that platforms entering the virtual asset custody sector must be able to identify and block transactions from suspicious accounts or risk having their wallets seized.

The CNA report also states that these tests are limited to banks only, with little prospect of expanding to individual investors.

Recently, Taiwan has emerged as a hub for major crypto events such as Taipei Blockchain Week. The digital asset market in Taiwan, Statista predicts, is likely to grow by 7.74 percent between 2024-2028, resulting in a market volume of $3,391 million (roughly Rs. 28,474 crore) by 2028.

In June of this year, Taiwanese government officials joined forces with local crypto companies to form the Taiwan Crypto Blockchain Self-Regulatory Organization (TCBSRO). The aim of this body is to implement industry standards to improve and regulate the crypto sector in the country.