Taiwan Poised to Launch First Locally Issued Stablecoin by 2026, Currency Decision Pending
Taiwan is preparing to potentially launch its first locally issued stablecoin by the second half of 2026, pending a final decision on the currency it will be pegged to. The move signals a growing acceptance of digital assets within the nation’s financial framework, but also highlights complex considerations surrounding its currency controls.
According to reports from local media outlets,Peng Jin-long,Chair of Taiwan’s Financial Supervisory Commission (FSC),informed lawmakers this week that the draft Virtual Assets Service Act has successfully navigated initial cabinet reviews. Passage through a third reading in the next legislative session is anticipated, paving the way for stablecoin-specific regulations within six months – setting a tentative launch window of late 2026.
The forthcoming legislation does not limit issuance to traditional banks, although the FSC and Taiwan’s central bank have agreed that financial institutions will take the lead in the initial rollout. A key question remains unanswered: which currency will back the stablecoin? A digital token’s value is intrinsically linked to the real-world asset it represents, and peng indicated the choice lies between the U.S. dollar and the Taiwan dollar, contingent on market demand.
A stablecoin backed by the U.S. dollar would circumvent a significant challenge within Taiwan’s financial system – the stringent restrictions on exporting the Taiwan New Dollar. The island’s central bank has historically maintained firm control over its currency, actively preventing its circulation outside of Taiwan and suppressing unauthorized offshore transactions.
“Stablecoins, by their very nature, are designed to facilitate cross-border settlement,” explained a senior official, “and this capability could potentially undermine decades of efforts to maintain onshore currency control and prevent unofficial pricing in foreign markets.”
Currently, regulators are prioritizing the development of rules centered around full reserve backing, strict asset segregation, and domestic custody requirements. However, the essential question of the stablecoin’s underlying currency remains unresolved. This decision will ultimately determine whether the project evolves into a secure, low-risk payments solution or presents a challenge to Taiwan’s established currency framework.
The choice is not merely technical; it’s a strategic one with far-reaching implications for Taiwan’s financial future.
Why: Taiwan is moving towards issuing a stablecoin to embrace digital assets and potentially improve payment systems. However, this is complicated by the country’s strict currency controls.
Who: Peng jin-long, Chair of Taiwan’s Financial Supervisory Commission (FSC), is leading the effort. Financial institutions are expected to lead the initial rollout.
What: The draft virtual Assets Service Act has passed initial reviews,paving the way for stablecoin regulations and a potential launch by late 2026. The key decision is whether the stablecoin will be backed by the U.S. dollar or the Taiwan dollar.
How did it end?: The article doesn’t have a definitive “end” as the decision on the backing currency is still pending. The process is currently in the regulatory phase, with a tentative launch window set for late 2026.The outcome hinges on balancing the benefits of stablecoins with Taiwan’s existing financial controls.
