Taiwan’s financial regulators are targeting mid‑2026 for the launch of the island’s first government‑approved stablecoin, pending passage of a new regulatory framework.
Key Takeaways:
- Taiwan’s Financial Supervisory Commission (FSC) expects the Virtual Assets Service Act (VASA) to pass in early 2026, paving the way for the domestic stablecoin launch by mid‑year.
- Only licensed financial institutions will be allowed to issue the stablecoin, under strict rules for reserve backing, custody, and anti-money laundering compliance.
- Regulators are still debating whether the stablecoin will be pegged to the New Taiwan dollar (TWD) or the United States dollar (USD), which will determine its domestic and international use cases.
During a hearing on Wednesday, December 3, FSC Chair Peng Jin‑long announced plans for Taiwan’s first regulated stablecoin, noting that the launch could be possible mid-2026. The timing depends on the passage of the Virtual Assets Service Act, which is currently awaiting cabinet review before submission to the legislature. The draft law is designed to regulate virtual asset service providers and establish a legal framework for stablecoin issuance and digital-asset operations.
The FSC emphasized that issuance will initially be restricted to licensed financial institutions. This approach aims to mitigate risk while ensuring compliance with domestic financial standards, including full reserve backing, proper segregation of customer funds, and robust custody procedures.
FSC Sets Strict Issuance Rules Under Incoming Virtual Asset Law
Officials highlighted several regulatory guardrails intended to protect investors and maintain financial stability. The proposed rules ensure that each stablecoin is fully backed by reserves and that user funds are segregated from issuer assets to prevent misuse or insolvency risk. Issuers will also be required to maintain domestic custody of reserves to reduce reliance on foreign institutions. In addition, the framework incorporates strict anti-money laundering (AML) and consumer protection requirements. These measures reflect Taiwan’s cautious approach to integrating digital assets into its financial system, balancing innovation with regulatory oversight.
Officials Still Debating TWD or USD Peg for 2026 Launch
The currency peg remains a critical decision for the stablecoin’s future. A TWD peg would likely limit usage to domestic payments and retail adoption within Taiwan, while a USD peg could make the stablecoin suitable for cross-border transactions and broader participation in the global crypto market. FSC Chair Peng emphasized that regulators are carefully evaluating both options to optimize financial stability and utility for consumers and institutions. The chosen peg will determine not only how the stablecoin functions within Taiwan but also its potential role in international crypto markets.
Industry Reaction Mixed as Traders Weigh Regional Implications
As of writing, major stablecoins like Tether (USDT) and USD Coin (USDC) remain steady around $1.00, showing no immediate market disruption. However, the announcement is generating interest in Asia’s crypto and fintech communities. A regulated domestic stablecoin could encourage local banks and fintech firms to integrate digital assets into payments, remittances, and other financial services, while also attracting international attention if a USD peg is chosen. Observers note that a Taiwanese stablecoin could reduce reliance on offshore stablecoins for regional transactions and create a more compliant infrastructure for digital payments within the country.
What’s Next?
Taiwan’s launching of its domestic stablecoin eyes legislative approval of the Virtual Assets Service Act for a successful setout. Once passed, detailed regulations on reserve management, custodial standards, and operational compliance will be issued by FSC. Experts are expecting that the issuance could happen approximately six months after law becomes effective, which falls to a mid-2026 launch.
The stablecoin is expected to support digital payments, international transfers, and digital-asset interoperability. Observers are closely watching which institutions obtain licenses, the chosen peg of currency, and the final regulatory framework, as these factors are crucial for adoption and the stablecoin’s impact on Taiwan’s crypto ecosystem.
Summary
Taiwan’s Financial Supervisory Commission is targeting a mid‑2026 launch for the country’s first government‑approved stablecoin, contingent on the Virtual Assets Service Act, with issuance limited to licensed financial institutions and a final decision pending on a TWD or USD peg.
