Taiwan’s regulators are accelerating plans for the country’s first local stablecoin, though the choice of currency backing remains unresolved.
Taiwan’s draft Virtual Assets Service Act has cleared cabinet review, marking a major step toward establishing a comprehensive regulatory framework. The Financial Supervisory Commission said the bill could pass its third reading in the next legislative session, after which stablecoin-specific rules would be drafted within six months. This timeline places the earliest possible launch in the second half of 2026.
According to FSC Chair Peng Jin long, stablecoin issuance will not be limited to banks, though financial institutions will lead the initial phase. The most sensitive topic — the currency peg — has yet to be decided. Both the US dollar and the Taiwan dollar remain under consideration, with market demand likely to guide the final choice.
The peg decision carries significant weight due to Taiwan’s strict monetary controls. The Taiwan dollar cannot circulate offshore, making a USD-backed stablecoin operationally simpler but potentially challenging for the existing currency regime as stablecoins inherently enable cross-border transfers. As regulators design rules on full reserves, asset segregation and local custody, the currency decision will determine whether Taiwan’s first stablecoin becomes a low-risk payment instrument or a pressure point for the current monetary framework.
