FSC Establishes Task Force to Promote Tokenization of Real-World Assets (RWA)

In order to discuss the preparation needed to promote the tokenization of real-world assets in Taiwan, the Financial Supervisory Commission (FSC), also known as the Financial Supervisory Commission, collaborated with the Fintech Co-Creation Platform to establish the "Real World Assets (RWA) Tokenization Working Group" and held its first meeting on June 13, 2024. Source

Financial Supervisory Commission Collaborates to Establish RWA Tokenization Task Force

The Financial Supervisory Commission (FSC) is teaming up with Taiwan Depository & Clearing Corporation (TDCC) and six financial institutions to establish the "Real World Asset Tokenization Task Force." The six financial institutions include Taishin Bank, Taipei Fubon Bank, CTBC Bank, Cathay Securities, Cathay Securities Investment Trust, and Yuanta Financial Holdings. They will collectively discuss matters related to promoting RWA tokenization.

What is RWA Tokenization?

RWA includes financial assets such as stocks, bonds, physical assets like real estate, precious metals, intangible assets like carbon credits, and more. RWA tokenization involves using technologies like blockchain, cryptography, or smart contracts to transform these real-world assets into digital tokens for subsequent trading or service provision. Tokenization of real-world assets is widely recognized internationally for its potential advantages such as 24/7 trading, cross-border and cross-time zone transactions, reduced investment barriers, improved operational efficiency, real-time settlement, increased liquidity, and transparency.

Potential Advantages and Challenges of Promoting RWA Tokenization

While RWA tokenization offers numerous potential advantages, it also faces challenges related to regulation, legal issues, and interoperability. To explore the necessary preparations for promoting RWA tokenization in Taiwan, the FSC has established a project team with relevant financial institutions aimed at developing financial technology in a forward-looking and comprehensive manner.

Task Force Members and Operation

The FSC stated that to ensure the smooth progress of the RWA tokenization task force, in addition to the Innovation Center, it will also invite representatives from relevant departments to participate to understand the professional knowledge and practical operations of RWA tokenization and discuss policy and regulatory implications. The task force members have reached a consensus to select two assets as the targets for tokenization. They will hold meetings every 3 to 4 weeks to discuss tokenization methods, analyze asset custody and trading, with the ultimate goal of financial institutions involved proposing a Proof of Concept (POC), business trial, or innovative experiment.

FSC Emphasizes Financial Technology Development

The FSC emphasizes its focus on the development of financial technology, particularly with the rapid development of Web3 and its related applications such as tokenization and decentralized finance. International organizations and other countries have put forward regulatory suggestions and development plans. In order to align with international financial market trends and enhance regulatory efficiency, the FSC hopes that through the operation of the "RWA Tokenization Task Force," it can strengthen dialogue with industry players and related units, focusing on innovative technologies, models, and applications to enhance financial technology development and innovation.