Taiwan Moves Toward First Regulated Stablecoin As New Law Advances

Source: ETHNews Original Title: Taiwan Moves Toward First Regulated Stablecoin As New Law Advances Original Link: https://www.ethnews.com/taiwan-moves-toward-first-regulated-stablecoin-as-new-law-advances/ Taiwan is preparing to introduce its first fully regulated stablecoin, setting the stage for an official launch no earlier than late 2026.

The development hinges on the passage of the new Virtual Assets Service Act, which the island’s regulators aim to push through the current legislative cycle.

Legislation Nears Completion

The Financial Supervisory Commission (FSC) confirmed that the draft bill is nearing introduction, with expectations that lawmakers could approve it in the following session if progress remains smooth. The FSC chairman explained that the law will establish a formal regulatory framework for Taiwan’s virtual asset sector, which has operated without comprehensive legislation until now.

Once the Act takes effect, authorities plan to implement a six-month buffer period before any stablecoin can be issued. This phased approach is intended to give financial institutions and regulators time to finalize operational standards, risk controls, and licensing procedures.

Regulators Align On Issuer Requirements

Although the draft legislation does not explicitly restrict eligible issuers, both the FSC and the central bank have agreed that only financial institutions will be allowed to issue stablecoins during the initial rollout. The decision reflects a cautious strategy meant to mitigate risks to financial stability, especially given Taiwan’s tightly managed banking environment.

The regulators’ framework has been significantly influenced by the EU’s MiCA regulation, which has become a reference model for global stablecoin legislation. Taiwan’s approach mirrors MiCA’s emphasis on clear governance standards, reserve transparency, and issuer accountability.

Peg Still Undecided

A key detail remains unresolved: whether the stablecoin will be pegged to the Taiwan dollar (TWD) or the U.S. dollar (USD). Officials acknowledged ongoing discussions, noting that each choice carries different implications for liquidity, adoption, and integration with local financial markets.

The central bank has been consulting with the FSC for months on the licensing structure and capital requirements for issuers. Their joint objective is to ensure that any new stablecoin does not disrupt Taiwan’s monetary system or destabilize traditional banking operations.

A Structured Path Toward Launch

Taiwan’s upcoming legislation represents its most concrete step toward regulated digital assets. If the bill is passed as expected, and the six-month transition period unfolds without delays, the country may enter 2027 with a fully compliant stablecoin framework in place, positioning it alongside jurisdictions pushing for safer, regulated adoption of cryptocurrency technologies.