Taiwan is set to launch its first domestically issued stablecoin in the latter half of 2026, although regulators have yet to determine the currency to which the token will be linked.
According to local reports, Financial Supervisory Commission Chair Peng Jin-long informed lawmakers this week that the draft Virtual Assets Service Act has successfully completed initial cabinet evaluations and is on track for a third reading next session. Specific regulations regarding stablecoins are expected within six months, making the earliest possible launch late 2026.
The legislation does not limit issuers to banks, but the FSC and Taiwan’s central bank have agreed that financial institutions will spearhead issuance in the initial phase, according to Peng.
However, what remains uncertain is the currency backing: A stablecoin is a digital token whose worth is tied to a real-world asset like a fiat currency. Peng indicated that the stablecoin could be pegged to either the U.S. dollar or the Taiwan dollar, depending on market demand, but no definitive decision has been made yet.
A U.S. dollar-backed stablecoin would address the most contentious issue in Taiwan’s financial landscape: the stringent restrictions on exporting the Taiwan currency abroad.
The Taiwan currency cannot legally circulate outside the island, and the central bank has a long history of monitoring attempts to use it for transactions without a direct link to Taiwan.
By design, stablecoins facilitate cross-border transactions, a feature that could jeopardize decades of efforts to keep the currency localized and prevent unofficial offshore valuations.
Currently, regulators are in the process of drafting regulations based on full reserve backing, strict asset segregation, and domestic custody requirements.
Nonetheless, the fundamental question of which currency Taiwan’s first stablecoin will represent remains unresolved, and this choice will dictate whether the initiative becomes a low-risk payment tool or challenges the island’s currency framework.
