The move comes as part of efforts by Taiwan’s local regulators to encourage institutional crypto adoption. Taiwan aims to test custody services through local banks in the cryptocurrency field with pilot applications.

The FSC’s plans aim to help local financial institutions gain proficiency in securely storing and managing crypto assets.

Thanks to these pilot applications, financial institutions will have the opportunity to improve their own services and will take an important step to increase trust in cryptocurrencies. Three private banks in Taiwan have expressed interest in trying out the crypto custody business before moving into the pilot phase.

The FSC stated that financial institutions that want to participate in crypto custody trials must apply to custody certain types of assets. For example, applying organizations will need to target crypto assets such as Bitcoin, Ether or Dogecoin.

At the same time, these organizations should also provide information about whether the users they will serve are professional investors or general investors. This situation is of great importance in terms of carrying out the regulations in the sector in a transparent manner.

Hu Zehua, director of FSC’s comprehensive planning department, explained the details of this process at the press conference. Hu stated that the authority will announce information about the pilot application to the public at least 15 days before it starts collecting applications.

This is considered a measure to ensure that both financial institutions and investors have sufficient information about the process. Additionally, FSC plans to collect public feedback on the proposed trial and revise the process accordingly.

The trial of crypto custody services is interpreted as an indicator of Taiwan’s positive approach towards cryptocurrencies. Trying to lead the way in the regulation and adoption of crypto assets, especially among countries in the Asia-Pacific region, Taiwan aims to gain an important position in the international arena with these steps.

However, the adoption of crypto custody services can contribute to wider acceptance of the cryptocurrency ecosystem, as well as increasing the confidence of local investors.

When financial institutions have the ability to securely store crypto assets, they can increase interest in cryptocurrencies from both individual and institutional investors.

This new initiative by the Taiwan Financial Supervisory Commission towards crypto custody services may strengthen the country’s regulations in the field of cryptocurrency and create new opportunities for investors. The effects of this step on the industry in terms of the future of crypto assets are eagerly awaited.