The financial landscape in Taiwan is on the brink of a transformative shift as four leading banks—China Trust Commercial Bank, Cathay United Bank, KGI Bank, and Federal Bank—have officially submitted applications to offer virtual asset custody services, with approval decisions expected by the end of June 2025. This marks a pivotal moment in the integration of traditional finance and digital assets, signaling growing institutional interest in cryptocurrency infrastructure.
Regulatory momentum began in late 2024 when Taiwan’s Financial Supervisory Commission (FSC) launched a thematic pilot program for virtual asset custody, releasing detailed guidelines and Q&A materials to guide financial institutions. From January 1 to April 30, 2025, banks were invited to apply under this framework. The four aforementioned institutions met the initial deadline, positioning them as front-runners in what could become the first licensed crypto custody offerings in the region.
👉 Discover how financial institutions are stepping into the future of digital asset management.
A Growing Wave of Institutional Interest
Beyond the first four applicants, the FSC has confirmed that Taishin International Bank is currently undergoing guidance for its application, while two additional private banks are actively exploring the opportunity. This brings the total number of banks expressing interest to seven—highlighting strong institutional confidence in the long-term viability of digital asset services.
According to Hu Tse-hua, Director of the Innovation Division at the FSC, these early movers have demonstrated robust preparedness in areas such as risk management, cybersecurity infrastructure, and operational readiness. Given the novelty of crypto custody, each bank is tailoring its approach based on scale, strategic goals, and technical capabilities.
To accommodate broader participation, the FSC has extended access to the program. While the initial application window closed in April 2025, a second phase will open on June 15, 2025, with no fixed end date—allowing more banks to join at their own pace.
Why Bitcoin Custody Matters for Banks and Investors
For traditional financial institutions, offering Bitcoin custody represents more than just a new revenue stream—it's a strategic entry point into the expanding ecosystem of digital finance. Banks typically charge a fee based on the value of assets under custody, similar to how they manage traditional securities. This creates recurring fee-based income with relatively low capital exposure.
Moreover, by providing secure storage solutions for cryptocurrencies, banks can enhance trust in the broader digital asset market. For crypto exchanges, partnering with regulated custodians reduces counterparty risk by moving part of their holdings off volatile platforms and into professionally managed environments.
👉 See how secure digital asset custody could reshape investor confidence.
From an investor perspective, having banks involved significantly improves perceived safety. When virtual assets are held by reputable, regulated entities, retail and institutional investors alike gain peace of mind—knowing their holdings benefit from stringent compliance standards, insurance frameworks, and audit trails.
This tripartite benefit—boosting bank revenues, strengthening exchange security, and increasing investor trust—creates a win-win scenario across the financial ecosystem.
Core Keywords Driving Market Transformation
Key terms shaping this evolution include:
- Bitcoin custody
- virtual asset custody
- digital asset services
- crypto custody
- financial innovation
- regulated crypto services
- institutional crypto adoption
- secure digital asset storage
These keywords reflect both user search intent and the broader regulatory and commercial trends fueling growth in the sector. Their natural integration into industry discourse underscores a maturing market where security, compliance, and accessibility are paramount.
👉 Explore how regulated financial players are building bridges to the crypto economy.
Frequently Asked Questions (FAQ)
Q: What does "virtual asset custody" mean?
A: It refers to professional storage and protection of digital assets like Bitcoin using secure systems, including cold wallets, multi-signature authentication, and regulatory oversight—similar to how banks safeguard traditional financial assets.
Q: Are these services available to individual investors yet?
A: Not yet. The applications are under review, with approvals expected by late June 2025. Once granted, banks will begin rolling out services, likely targeting institutional clients first before expanding to high-net-worth individuals.
Q: How do banks ensure the security of stored cryptocurrencies?
A: Through a combination of offline cold storage, advanced encryption, multi-party authorization protocols, regular audits, and insurance coverage—designed to prevent theft, fraud, or system failure.
Q: Will this make investing in crypto safer?
A: Yes. Bank-backed custody reduces reliance on unregulated exchanges and enhances transparency. With stronger oversight and accountability, investor protection improves significantly.
Q: Can any bank offer this service now?
A: No. Only banks approved under the FSC’s pilot program may legally provide virtual asset custody. Participation requires meeting strict technical, operational, and compliance criteria.
Q: Is Taiwan the first in Asia to allow bank-based crypto custody?
A: While not the first overall—Japan and Singapore have earlier precedents—Taiwan’s structured regulatory approach positions it as a progressive player in fostering responsible fintech innovation within a secure legal framework.
As the June 2025 decision deadline approaches, all eyes will be on the FSC’s final approvals. The launch of the first licensed Bitcoin custody service could set a precedent for deeper integration between traditional banking and decentralized finance—ushering in a new era of secure, compliant, and accessible digital asset management across Asia.