Taiwan could see its first locally issued stablecoin go live in the second half of 2026, although regulators have yet to decide which currency the token will be pegged to.
Local media in Taiwan report Financial Supervisory Commission Chairman Peng Jin-long told lawmakers this week that the draft Virtual Assets Service Act has cleared initial cabinet reviews and could pass its third reading next session. Regulations specific to stablecoins will follow within six months, putting the earliest possible launch at the end of 2026.
The legislation does not limit issuers to banks, although the FSC and the Central Bank of Taiwan have agreed that financial institutions will lead issuance in the initial phase, Peng said.
What remains unclear is the currency backing: A stablecoin is a digital token whose value is tied to the value of a real-world asset, such as a fiat currency. Peng said the stablecoin could be pegged to the US dollar or the Taiwan dollar, depending on market demand, but no decision has been made.
A US dollar-backed currency would circumvent the most difficult problem in Taiwan’s financial system: the strict limits on exporting Taiwan’s currency offshore.
Taiwan’s currency cannot legally circulate offshore, and the central bank has a long history of policing attempts to use it for transactions with no direct connection to the island.
Stablecoins by design facilitate cross-border settlement, a feature that could undermine decades of efforts to keep the currency onshore and prevent unofficial offshore pricing.
So far, regulators are drafting rules based on full reserve backing, strict asset segregation and domestic custody requirements.
But the fundamental question of which currency Taiwan’s first stablecoin will represent remains unresolved, and the choice will determine whether the project becomes a low-risk payment tool or a challenge to the island’s currency framework.
