Taiwan Targets Launch of First Domestic Stablecoin by Mid-2026 Under New Crypto Regulations

Regulators move on stablecoin law as issuance plan moves forward

TL;DR

• Taiwan’s regulators have formally committed to issuing the country’s first domestic stablecoin by the second half of 2026, potentially as early as mid-year.
• The stablecoin may be pegged to either the New Taiwan Dollar (NTD) or the U.S. dollar (USD), will be issued exclusively by licensed financial institutions, and would follow strict compliance rules including full-reserve backing, segregated custody, local custody of reserves, and regular audits.
• The launch depends on passage of the Virtual Assets Service Provider (VASP) Act, followed by a six-month buffer period for regulatory implementation.

Taiwan’s financial watchdog confirmed on December 4, 2025 plans are moving forward for the island’s first regulated stablecoin, with a target launch in late 2026 — though officials say a debut as early as June or July of that year remains on the table if all steps go smoothly. The project enters the final stretch as the draft Virtual Assets Service Provider (VASP) Act heads for a cabinet review and then a third reading during the next legislative session, triggering a six-month lead time before issuance.

Officials from the Financial Supervisory Commission (FSC) and the central bank clarified that only regulated financial institutions — such as licensed banks — will be eligible to issue the token at the outset, reflecting a deliberately conservative, risk-aware rollout strategy. The stablecoin’s final peg (whether to NTD or USD) has yet to be finalized, leaving open the possibility of a domestic-currency solution or a more internationally accessible dollar-pegged instrument.

Regulatory guardrails under discussion would require full-reserve backing, segregation of customer funds from issuer capital, local custody of reserves, and routine auditing — a framework loosely inspired by the EU’s Markets in Crypto-Assets Regulation (MiCA). Officials argue these safeguards are critical to embedding tokenized assets within a robust digital-finance architecture while preserving financial stability.

From the government’s perspective, the stablecoin could serve multiple strategic purposes: enabling efficient domestic payments, powering programmable payments, and potentially supporting cross-border transfers once compliance measures are fully operational. FSC Chairman Peng Jin-long emphasized the significance of the initiative, stating, “The introduction of a domestic stablecoin would mark an important milestone in bringing virtual-asset activities into a fully regulated environment.”

Beyond technology or hype, the stablecoin initiative reflects a broader regulatory ambition: to transition Taiwan’s crypto landscape from a fragmented gray zone into a structured, compliance-oriented ecosystem. Stakeholders note that the VASP draft has already undergone multiple cabinet-level reviews and reportedly achieved consensus among key parties, setting the stage for what could become a landmark development in Asia’s digital-asset regulation.

Yet success hinges on multiple moving parts: timely passage of legislation, regulatory readiness, issuer compliance, and — ultimately — user adoption. If Taiwan navigates those with discipline, the country could emerge as one of the region’s early pioneers in issuing a fully regulated, domestically backed stablecoin.

This article has been refined and enhanced by ChatGPT.