TLDR
- Taiwan plans to launch its first regulated stablecoin in the second half of 2026.
- The Virtual Assets Service Act has passed initial cabinet reviews and awaits a third reading.
- Stablecoin regulations will be finalized within six months after the main legislation is approved.
- The Financial Supervisory Commission confirmed financial institutions will initially lead the issuance.
- Authorities have not yet decided if the stablecoin will be tied to the Taiwan dollar or the U.S. dollar.
Taiwan’s first regulated stablecoin could enter the market in late 2026, pending final approval of a draft law. Regulators confirmed the draft Virtual Assets Service Act has passed early reviews and may clear the legislature next session. The Financial Supervisory Commission (FSC) expects stablecoin-specific rules to follow within six months.
Taiwan Stablecoin Law Clears Cabinet Review
Taiwan’s FSC Chair Peng Jin-long confirmed the draft law passed initial cabinet-level screening this week. Lawmakers will likely consider it for a third reading in the next legislative session. Once passed, stablecoin regulation will follow shortly.
Peng told lawmakers the FSC will complete stablecoin rules within six months of the main act passing. Taiwan expects the stablecoin to launch in the second half of 2026 if all steps proceed on time. “The goal is to ensure a stable and secure launch,” Peng said.
The proposed framework will require full reserve backing and domestic asset custody. It will also enforce clear separation between user assets and issuer funds. These conditions aim to protect users and align with Taiwan’s regulatory priorities.
Peg Currency Still Undecided
Authorities have not finalized whether the coin will track the Taiwan dollar or the U.S. dollar. Peng stated both options remain open depending on future market demand. No official timeline exists for this currency decision.
A U.S. dollar peg could ease cross-border use, but it may not reflect Taiwan’s domestic economic needs. A Taiwan dollar peg would align with the island’s existing financial structure. Both options present operational and regulatory tradeoffs.
Taiwan restricts the offshore circulation of its currency, which may affect stablecoin design. The central bank enforces strict controls to prevent Taiwan dollar transactions abroad. Any stablecoin involving the Taiwan dollar must comply with these rules.
Initial Issuance Led by Financial Institutions
Issuance will initially involve Taiwan’s financial institutions, though the law will not limit participation to banks. The FSC and the central bank jointly agreed on this initial structure. Other entities may join later under the same rules.
This approach reflects the FSC’s risk-managed strategy for introducing virtual assets in Taiwan. Peng emphasized the importance of stability during the stablecoin’s early stage. Taiwan aims to ensure the system is robust before broader rollout.
Taiwan will require issuers to meet custody and compliance obligations under strict local supervision. All issuers must maintain full reserves and transparent asset reporting. Taiwan’s regulator will verify compliance through regular oversight.
Key Uncertainties Remain
Taiwan has not yet announced any preferred platforms or issuers for the new stablecoin. Peng declined to specify launch partners during the latest committee session. Regulatory approvals will determine participants after rules are finalized.
The central bank will work closely with the FSC to monitor all stages of issuance. Taiwan’s government continues to evaluate technology options for stablecoin integration. Full technical guidance will follow the legislative process.
Despite progress, Taiwan’s authorities have not released a public draft of the stablecoin rules. Lawmakers have urged regulators to maintain transparency throughout the process. Taiwan’s stablecoin framework remains a work in progress.
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