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Financial Supervisory Commission (FSC) opens pilot program for deposit tokens; Taishin inquires but has not formally filed
The Financial Supervisory Commission (FSC) announced on the 22nd that it will open applications to pilot deposit token services under the open banking framework. According to an official press release, this is to respond to the tokenization development of real-world assets (RWA) and to take reference from international developments in deposit tokens. The goal is to give banks room to develop practical operating models, technology applications, and risk management mechanisms for deposit tokens, as a reference for future regulatory frameworks and legal adjustments. The business plan must cover five items, including how to redeem and destroy the tokens after the pilot ends. The FSC explained that when a bank issues deposit tokens, it is presenting or recording the bank’s deposits in a new form such as blockchain. The legal nature still remains that of bank deposits. Related business principles are, in principle, governed by existing regulations such as the Banking Act. As it is an extension of existing business models, banks may apply by submitting an application under the “Guidelines for Financial Industry Applicants to Conduct Business Pilot Programs.”
To apply, the bank must specifically describe five items in its business plan: the scope of the pilot and use cases; the issuance, transfer, redemption, and destruction procedures for the tokens, along with an analysis of differences from existing deposit and remittance operations; reconciliation, audit trail matching, and control mechanisms between deposit accounting and token ledgers; the technology architecture, system operation methods, and security control mechanisms, such as distributed ledger or blockchain architecture, nodes, wallets, and smart contracts; and the redemption, destruction, and customer rights protection mechanisms for the tokens when the pilot period expires or is terminated.
Director of the banking bureau: deposit tokens pay interest, unlike stablecoins
According to a report by CNA (Central News Agency), in a Mid-Autumn Festival press briefing, the Director of the FSC Banking Bureau, Tong Zhengzhang, said that the legal nature of deposit tokens is still deposits and that they must pay interest. In a Business Insider Taiwan report, he repeatedly emphasized during the briefing that deposit tokens “are still deposits.” Deposit insurance still applies; banks still set aside deposit reserves; and what customers recognize in financial terms is still deposits.
He also differentiated the two: stablecoins are virtual assets and maintain price stability by linking to assets with value; deposit tokens, on the other hand, are directly backed by bank deposits—“the use cases and the related regulations are completely different.” Regarding currency, the FSC currently mainly envisions New Taiwan Dollars. If enterprises have international trade needs, they may also propose other currencies such as US dollars. However, this involves foreign exchange receipts and payments reporting and the central bank’s authority; Tong Zhengzhang said the FSC “will not pre-assume,” and is still discussing with the central bank.
Taishin inquired through regulatory consultations but has not formally filed
According to a CNA report, currently one bank is exploring the possibility of piloting the program. Taishin Bank previously asked about the proposal during a regulatory consultation session, and outside observers expect that Taishin may have the chance to become the first bank to apply. Business Insider Taiwan cited Tong Zhengzhang as saying that Taishin had already put forward the idea through regulatory consultations. After assessment by the competent authority, it was considered possible to open the pilot under the business pilot mechanism.
There are two types of settlement methods. Tong Zhengzhang said the simplest scenario is when a bank issues its own deposit tokens and both parties to the transaction are customers of the same bank, with settlement and clearing completed entirely within the bank. The second scenario involves cross-bank transfers; for example, an exporter and an importer belong to different banks, and a financial services company would have to play an important role. He said the pilot has no explicit limits, but based on current understanding, banks intending to pilot would likely only conduct an in-bank deposit token trial and would not yet involve cross-bank clearing.
For use cases, Tong Zhengzhang used trade finance as an example. Including trade in imports and exports, establishing letters of credit, and bill discounting/pawn and related cash flow services could potentially be put on-chain, because trade financing itself inherently involves payment functions. According to a report in Economic Daily News, he also said that services that customers are already accustomed to using on-chain would become priority use cases. Since virtual-coin investments on-chain are already fairly common, they are expected to become one of the use cases. Credit cards and wealth management, although not yet on-chain, should be evaluated by banks under risk approval.
The FSC said it will learn about market demand, business operations, and related risks through the banks’ pilot programs, and will appropriately consider amendments to relevant regulatory systems and legal requirements.
This article, “FSC opens pilot program for deposit tokens under open banking; Taishin inquires but has not formally filed,” first appeared on .
Financial Supervisory Commission (FSC) opens pilot program for deposit tokens; Taishin inquires but has not formally filed
The Financial Supervisory Commission (FSC) announced on the 22nd that it will open applications to pilot deposit token services under the open banking framework. According to an official press release, this is to respond to the tokenization development of real-world assets (RWA) and to take reference from international developments in deposit tokens. The goal is to give banks room to develop practical operating models, technology applications, and risk management mechanisms for deposit tokens, as a reference for future regulatory frameworks and legal adjustments. The business plan must cover five items, including how to redeem and destroy the tokens after the pilot ends. The FSC explained that when a bank issues deposit tokens, it is presenting or recording the bank’s deposits in a new form such as blockchain. The legal nature still remains that of bank deposits. Related business principles are, in principle, governed by existing regulations such as the Banking Act. As it is an extension of existing business models, banks may apply by submitting an application under the “Guidelines for Financial Industry Applicants to Conduct Business Pilot Programs.”
To apply, the bank must specifically describe five items in its business plan: the scope of the pilot and use cases; the issuance, transfer, redemption, and destruction procedures for the tokens, along with an analysis of differences from existing deposit and remittance operations; reconciliation, audit trail matching, and control mechanisms between deposit accounting and token ledgers; the technology architecture, system operation methods, and security control mechanisms, such as distributed ledger or blockchain architecture, nodes, wallets, and smart contracts; and the redemption, destruction, and customer rights protection mechanisms for the tokens when the pilot period expires or is terminated.
Director of the banking bureau: deposit tokens pay interest, unlike stablecoins
According to a report by CNA (Central News Agency), in a Mid-Autumn Festival press briefing, the Director of the FSC Banking Bureau, Tong Zhengzhang, said that the legal nature of deposit tokens is still deposits and that they must pay interest. In a Business Insider Taiwan report, he repeatedly emphasized during the briefing that deposit tokens “are still deposits.” Deposit insurance still applies; banks still set aside deposit reserves; and what customers recognize in financial terms is still deposits.
He also differentiated the two: stablecoins are virtual assets and maintain price stability by linking to assets with value; deposit tokens, on the other hand, are directly backed by bank deposits—“the use cases and the related regulations are completely different.” Regarding currency, the FSC currently mainly envisions New Taiwan Dollars. If enterprises have international trade needs, they may also propose other currencies such as US dollars. However, this involves foreign exchange receipts and payments reporting and the central bank’s authority; Tong Zhengzhang said the FSC “will not pre-assume,” and is still discussing with the central bank.
Taishin inquired through regulatory consultations but has not formally filed
According to a CNA report, currently one bank is exploring the possibility of piloting the program. Taishin Bank previously asked about the proposal during a regulatory consultation session, and outside observers expect that Taishin may have the chance to become the first bank to apply. Business Insider Taiwan cited Tong Zhengzhang as saying that Taishin had already put forward the idea through regulatory consultations. After assessment by the competent authority, it was considered possible to open the pilot under the business pilot mechanism.
There are two types of settlement methods. Tong Zhengzhang said the simplest scenario is when a bank issues its own deposit tokens and both parties to the transaction are customers of the same bank, with settlement and clearing completed entirely within the bank. The second scenario involves cross-bank transfers; for example, an exporter and an importer belong to different banks, and a financial services company would have to play an important role. He said the pilot has no explicit limits, but based on current understanding, banks intending to pilot would likely only conduct an in-bank deposit token trial and would not yet involve cross-bank clearing.
For use cases, Tong Zhengzhang used trade finance as an example. Including trade in imports and exports, establishing letters of credit, and bill discounting/pawn and related cash flow services could potentially be put on-chain, because trade financing itself inherently involves payment functions. According to a report in Economic Daily News, he also said that services that customers are already accustomed to using on-chain would become priority use cases. Since virtual-coin investments on-chain are already fairly common, they are expected to become one of the use cases. Credit cards and wealth management, although not yet on-chain, should be evaluated by banks under risk approval.
The FSC said it will learn about market demand, business operations, and related risks through the banks’ pilot programs, and will appropriately consider amendments to relevant regulatory systems and legal requirements.
This article, “FSC opens pilot program for deposit tokens under open banking; Taishin inquires but has not formally filed,” first appeared on .
