Stablecoin Launch in Taiwan Expected by Mid-2026 as Regulations Progress
- Stablecoin launch in Taiwan is set for 2026 as lawmakers advance digital asset regulations.
- The debate continues over whether the stablecoin will be pegged to the Taiwan or US dollar.
- Taiwan explores Bitcoin for national reserves while tackling growing crypto-related fraud.
Taiwan is set to launch its first domestically issued stablecoin by the second half of 2026, as lawmakers move forward with legislation to regulate digital assets. However, crucial decisions about which currency the stablecoin will be pegged to remain unresolved, leaving a significant question mark over the project’s design.
The Financial Supervisory Commission (FSC) has made progress in the development of the draft Virtual Assets Service Act, which has already been reviewed by the cabinet. FSC chair Peng Jin-long said that the law might be ready to go through third reading in the coming legislative session. If it passes, regulations on stablecoins may follow in six months, which would bring Taiwan to the 2026 rollout of stablecoins.
Stablecoin Issuance Open to Financial Institutions in Taiwan
The draft law does not restrict the issuance of a stablecoin to banks, although the first mover would be financial institutions. Peng highlighted that this conservative strategy represents Taiwan’s ambition to scale in introducing domestic digital tokens. Beginning with the financial institutions, the regulators seek to evaluate risks before rolling out entirely.
One of the key areas of controversy refers to the anchor currency of a stablecoin. A Taiwan dollar-backed stablecoin is one of the options, but it would have to deal with major regulatory issues.
The foreign-exchange controls in Taiwan do not allow the circulation of the Taiwan dollar in foreign countries. Linking the coin to the Taiwan dollar would conflict with these established regulations, posing a challenge to regulators.
Also Read: Taiwan Cracks Down on the Biggest $72M Crypto Laundering Scheme
Alternatively, a US dollar-backed crypto asset might prevent such problems. This would be easier if it were associated with international markets and cross-border payments. The exchange rate in US dollars, however, also contains some issues with weakening Taiwan’s long-standing policy of retaining control of the local currency and avoiding its circulation overseas.
FSC Ensures Security in Taiwan’s Stablecoin Rollout
To provide the security, the FSC is developing measures that would involve comprehensive reserve support, well-secluded assets, and localized custody of client holdings. These security measures are meant to downplay the risks and make the digital currency secure and trustworthy for its users. Taiwan’s cautious strategy concerns the balance between innovation and regulation.
Market demand will determine the final decision on the anchor currency. According to Peng, there has been no commitment yet to the Taiwan dollar or the US dollar. The decision will be finalized depending on the market development in the following years.
Besides the digital currency, Taiwan is also considering including Bitcoin in its national reserve policy. The government and the Central Bank of Taiwan are considering Bitcoin as a potential strategic asset, and they are already planning pilots.
Also Read: Bitcoin-Friendly Taiwan Aims for 2026: Regulated Stablecoin Launch on Horizon
