Taiwan's First Regulated Stablecoin Expected to Launch Next Year

BlockBeats News, December 3rd, according to CoinDesk, the Taiwan region of China may see its first locally issued stablecoin in the second half of 2026, but the regulatory agency has not yet decided whether the token will be pegged to the New Taiwan Dollar or the US Dollar, a choice that will determine the project's challenge to Taiwan's currency control.

The Chairman of the Financial Supervisory Commission (FSC) of Taiwan, Thomas Huang, stated this week to legislators that the draft of the Virtual Asset Service Act has passed the initial cabinet review, is expected to be passed in the next session, and will introduce specific regulations for stablecoins within six months, potentially launching as early as the end of 2026.

Huang pointed out that the legislation does not restrict the issuer to be a bank, but the FSC and the Central Bank of Taiwan have reached a consensus that initial issuance will be led by financial institutions. What remains unclear is the stablecoin's pegged currency: a stablecoin is a digital token pegged to fiat currency or other real assets. Huang stated that the stablecoin may be pegged to the US Dollar or the New Taiwan Dollar, depending on market demand, but a final decision has not been made.

If pegged to the US Dollar, the stablecoin would bypass one of Taiwan's most challenging issues—the strict restrictions on the offshore use of the New Taiwan Dollar. Taiwan's currency is not allowed to circulate outside the country by law, and the Central Bank has long regulated any attempts of transactions not directly linked to the island. As stablecoins are inherently suited for cross-border settlements, this feature could impact Taiwan's decades-long efforts to maintain onshore circulation of its currency and prevent unofficial offshore pricing.

Currently, regulatory agencies are drafting rules that require full reserve backing, strict asset segregation, and local custody.