FSC opens "BTC custody in the financial industry": 5 banks are already interested, and applications will be accepted on New Year's Day next year

The Financial Supervisory Commission (FSC) officially announced that it will accept applications from banks, securities firms, and financial institutions for the trial operation of "themed business of virtual asset custody business" starting from January 1, 2025, in order to meet the growing demand for virtual asset custody and promote financial innovation. (Background: VSAP without a license must withdraw! How will the FSC's "virtual asset registration and money laundering prevention" draft affect the coin circle?) (Background: Taiwan's anti-fraud law includes "encryption exchange" in joint defense! The FSC announced that 4 sub-law drafts will be released by the end of the year) In early October, the FSC announced that it will open the application for "themed business of virtual asset custody business" for banks and securities firms, in response to the growing demand for virtual assets custody and to promote financial innovation. This week, the FSC officially released related application materials and Q&A, and announced that it will accept applications from operators for trial operation starting from January 1, 2025. Five banks have expressed interest. According to the FSC, five major private banks have already expressed interest in participating. The application period is from January 1, 2025 to the end of April. Whether it will be fully launched in the future will depend on the trial results. The applicants will also be expanded from banks and securities firms to financial institutions and partners of financial and technology industries. The review period is two months, and operators can also apply for counseling in advance. The trial period is six months. The FSC stated that there is no qualification restriction for Financial Institutions to apply, mainly based on security and risk management. According to the FSC's regulations, institutions wishing to participate in the trial must submit seven application documents, covering key elements such as custody mode, customer service, and regulatory compliance. Three banks have already expressed their interest in participating, and potential customers mainly come from virtual exchanges. The FSC expects that the first virtual coin custody business case will be officially launched in the first quarter of next year. Business scope and application documents Institutions wishing to apply need to submit seven application documents, including: custody mode: it is necessary to explain the types of virtual assets to be kept, service targets (such as virtual asset platforms, professional investors, etc.), custody processes and service volume, etc. Customer service: including customer attributes, service hours, deposit and withdrawal procedures, fee framework, and dispute resolution mechanism, etc. Regulatory compliance: legal basis to be followed, KYC (Know Your Customer), AML/CFT (Anti-Money Laundering and Counter-Terrorist Financing) measures, etc. Organizational management: clear division of responsibilities, professional knowledge training, and supervision and management system, etc. Security planning: covering venue equipment, digital identity recognition standards, privacy protection, and network security testing, etc. Asset isolation: customer assets must be separated from Financial Institution's own assets. Financial accounting system: accounting processing principles and financial report disclosure methods for storing assets, etc. Charging model and business opportunities For banks that intend to enter the virtual coin custody market, this business can not only enhance their service scope but also increase transaction fee income. Financial Institutions abroad usually charge a certain proportion of fees based on the scale of stored assets, which is attractive to Financial Institutions and virtual exchanges. Definition of business scope: excluding RWA or non-fungible tokens The FSC clearly stated that the business scope of this trial plan is limited to "virtual asset custody", covering virtual currencies such as BTC, but not including asset tokenization (RWA) and non-fungible tokens (NFT) and other types of virtual assets. The FSC emphasized that in the process of virtual asset custody, security and prevention of money laundering are the primary considerations, especially in responding to illegal virtual money. Related reports: VSAP without a license must withdraw! How will the FSC's "virtual asset registration and money laundering prevention" draft affect the coin circle? Taiwan's anti-fraud law includes "encryption exchange" in joint defense! The FSC announced that 4 sub-law drafts will be released by the end of the year. The FSC shoots 5 arrows to "make Taiwan the center of asset management in Asia", discusses financial special zones, and opens up cryptocurrency investment? (FSC opens "financial industry custody of BTC": 5 banks have expressed interest and will accept applications from January 1 next year. This article was first published on BlockTempo, the most influential blockchain news media in the field.)