TL;DR
- Taiwan plans to launch a regulated stablecoin in the second half of 2026 following the approval of the Virtual Assets Service Act.
- Financial institutions will handle the initial issuance, with full reserve backing, asset segregation, and domestic custody.
- The stablecoin could be pegged to the US dollar or the Taiwan dollar, a decision that will determine its scope and operational risks.
Taiwan is preparing to launch a regulated stablecoin, potentially debuting in the second half of 2026. The issuance depends on the approval of the Virtual Assets Service Act, which has already passed the initial cabinet reviews and could go through its third reading in the next legislative session. After approval, a period of up to six months is expected to implement the subordinate regulations, marking the earliest possible launch timeline.
The bill does not restrict issuance to banks, but the Financial Supervisory Commission (FSC) and the Central Bank agreed that financial institutions will lead the initial issuance. Preliminary rules include full reserve backing, strict asset segregation, and domestic custody, measures designed to reduce operational risks and maintain the integrity of the financial system.
Taiwan Must Choose the Backing Currency
The main pending issue is the backing currency. The stablecoin could be pegged to the US dollar or the Taiwan dollar, a decision that will define its scope and risks. A USD backing would bypass Taiwan’s strict offshore circulation limits and facilitate cross-border settlements. In contrast, a TWD backing would limit its usefulness for international transactions and keep the currency within the local control framework.
Stablecoins are designed to maintain a stable value against a real-world asset, and the introduction of Taiwan’s first stablecoin reflects their global proliferation. The local authority aims to create a secure payment instrument without compromising decades of policies intended to keep the currency circulating domestically and prevent unofficial offshore pricing.
Bank Participation Will Be Prioritized
The bill draws on the European Markets in Crypto-Assets Regulation, though it does not explicitly require issuers to be financial institutions. Still, the FSC prioritizes bank participation and regulated actors to minimize operational risks and ensure transparency in the process.
If the timeline holds, Taiwan could see its first local stablecoin operational by the end of 2026. The choice of backing currency and the enforcement of regulations will determine whether it becomes an efficient payment tool or a challenge for monetary control. For now, authorities are advancing in defining the legal and regulatory framework
