The financial landscape in Taiwan is undergoing a transformative shift as traditional banking institutions prepare to enter the digital asset arena. The Financial Supervisory Commission (FSC) has initiated a pilot program allowing banks to offer virtual asset custody services, marking a pivotal step toward integrating blockchain innovation with conventional finance. This strategic move not only aligns with global financial trends but also positions Taiwan as a forward-thinking hub for fintech innovation and digital asset regulation.
Under the pilot framework launched at the end of 2024, financial institutions can apply to provide secure custody solutions for virtual assets—addressing growing market demand while maintaining regulatory oversight. As of April 30, 2025, four major banks have officially submitted applications and are now under priority review:
- KGI Bank
- CTBC Bank
- Federal Bank
- Cathay United Bank
These institutions represent some of Taiwan’s most established financial players, signaling strong industry confidence in the future of digital asset management within regulated banking environments.
👉 Discover how financial institutions are preparing for the digital asset revolution.
A Regulated Pathway for Virtual Asset Custody
The FSC’s decision to include virtual asset custody under its thematic pilot program reflects a balanced approach—encouraging innovation while ensuring consumer protection and financial stability. By setting clear guidelines and offering Q&A resources, the commission has lowered entry barriers for banks seeking to explore this new frontier.
Eligible institutions were invited to submit their proposals between January 1 and April 30, 2025. The initial window allowed early adopters to demonstrate readiness in areas such as cybersecurity infrastructure, compliance protocols, risk management frameworks, and technical integration with blockchain networks.
Beyond the first wave of applicants, Taishin Bank is currently undergoing coaching and preparatory support from the FSC. This guidance phase ensures that participating banks meet stringent operational and security standards before launching any customer-facing services.
Recognizing that not all financial institutions operate on the same timeline, the FSC announced that starting June 15, 2025, it will open a second round of applications. This extension allows more banks and financial firms to prepare thoroughly, align internal strategies, and build robust systems tailored to virtual asset custody.
“This isn’t just about technology—it’s about trust,” said an FSC spokesperson. “We want to ensure that when banks begin offering these services, they do so with the highest level of security, transparency, and regulatory compliance.”
Why Bank-Led Custody Matters
Traditional cryptocurrency investors often rely on third-party exchanges or private wallets to store digital assets—options that come with significant risks, including hacking, loss of private keys, and lack of insurance coverage.
Bank-based custody changes the game by introducing:
- Institutional-grade security: Multi-layered encryption, cold storage solutions, and biometric access controls.
- Regulatory accountability: Clear audit trails, anti-money laundering (AML) compliance, and supervision by national financial authorities.
- Investor confidence: Trust in well-known banking brands reduces hesitation among retail and institutional investors alike.
This shift could accelerate mainstream adoption of digital assets across Taiwan, particularly among older demographics and conservative investors who prefer regulated financial intermediaries over decentralized platforms.
👉 Learn what institutional-grade crypto custody looks like in practice.
Core Keywords Driving the Shift
As this development unfolds, several key themes dominate the conversation:
- Virtual asset custody
- Banking innovation
- Fintech regulation
- Digital asset security
- Financial Supervisory Commission (FSC)
- Crypto banking
- Blockchain integration
- Regulated crypto services
These keywords reflect both user search intent and the broader industry trajectory—where security, legitimacy, and ease of access converge to shape the next generation of financial services.
Frequently Asked Questions (FAQ)
What is virtual asset custody?
Virtual asset custody refers to the secure storage and management of digital assets like cryptocurrencies on behalf of clients. It includes technical safeguards (e.g., cold wallets, multi-signature authentication) and legal protections to prevent unauthorized access or loss.
Why are banks getting involved in crypto custody?
Banks bring trust, regulatory compliance, and advanced security infrastructure. Their involvement lowers barriers for everyday users and institutional investors who require insured, auditable, and professionally managed solutions.
Is my crypto safe if held by a bank?
While no system is 100% immune to risk, bank-managed custody is expected to meet strict regulatory standards—including regular audits, fraud detection systems, and disaster recovery plans—making it one of the safest options available.
Can any bank in Taiwan offer this service now?
Not yet. Only institutions approved through the FSC’s pilot program can provide virtual asset custody. The current phase focuses on testing frameworks before broader rollout.
When will these services be available to the public?
There is no official launch date yet. After application review and technical validation, selected banks may begin limited operations in late 2025 or early 2026, pending final approvals.
How does this affect Taiwan’s fintech ecosystem?
This initiative strengthens Taiwan’s position in the global fintech race. By enabling regulated crypto custody, the FSC fosters innovation, attracts investment, and supports local startups building blockchain-based financial products.
👉 See how global banks are already leading in digital asset services.
Looking Ahead: A New Era of Financial Integration
The FSC’s progressive stance underscores a larger trend: the convergence of traditional finance and digital assets. As more banks complete their preparations and enter the pilot phase, consumers can expect safer, more accessible ways to invest in cryptocurrencies without sacrificing regulatory protection.
Moreover, this framework may pave the way for additional services down the line—such as crypto-backed loans, tokenized deposits, or even central bank digital currency (CBDC) integration.
For investors, the message is clear: the future of finance is hybrid. Digital assets are no longer fringe experiments—they are becoming part of the core offerings of trusted financial institutions.
As Taiwan continues refining its regulatory sandbox approach, other markets may look to its model as an example of how to balance innovation with prudence. With strong governance, technological rigor, and stakeholder collaboration, the vision of a secure, inclusive digital economy is becoming increasingly attainable.
The journey has just begun—but the direction is unmistakable.