Telecommunications company Taiwan Mobile Co. is exploring opportunities for collaboration with local crypto platforms, including potentially investing in one of the businesses.

The government-licensed wireless service provider is in early-stage talks with crypto firms about strategic partnerships, according to three people familiar with the matter, who asked not to be identified discussing private information.

Taipei-based XREX Inc., which describes itself as a blockchain-enabled financial institution, is among the companies in the conversations, the people said. No decisions have been made and a deal many not materialize, the people added.

Taiwan Mobile said it’s “open to any potential opportunities” but didn’t comment further. XREX’s co-founder Wayne Huang declined to say whether his firm is in discussions with the island’s second-largest telecom company.

Huang said he expects larger institutions to enter the web3 sector as the latter matures and regulatory clarity emerges, adding that XREX looks forward to partnering with telecom enterprises to drive adoption.

‘Synergies’

“Synergies are high because such institutions own a sizable, already-KYCed user base, while XREX offers domain expertise in blockchain and cybersecurity,” he said, using the acronym for know-your-customer rules.

The nebulous term “web3” refers to a vision of a decentralized internet built around blockchains, crypto’s underlying technology.

Taiwan Mobile may be “exploring the possibility of entering the fintech business, like what the Japanese telcos have been doing,” said Marvin Lo, a senior industry analyst at Bloomberg Intelligence.

The digital-asset industry is trying to recover from a $1.5 trillion market rout last year that sparked a series of high-profile bankruptcies, including the implosion of the FTX exchange. Crypto businesses shed thousands of jobs and venture capital funding dried up in the wake of the turmoil.

The US subsequently cracked down on crypto but other jurisdictions like Hong Kong and Dubai are trying to create regulatory frameworks that can protect customers while attracting investment from digital-asset businesses.

Taiwan in March appointed the Financial Supervisory Commission as the chief regulator for virtual-asset service providers. The commission is set to introduce detailed guidelines by the end of September.

Read more: Taiwan Set to Name Financial Watchdog as Main Crypto Regulator