Taiwan may issue its first locally issued stablecoin in the second half of 2026, but regulators have yet to decide which currency the token will be tied to.
According to local media reports in Taiwan, Financial Supervisory Commission Chairman Peng Jin-long told lawmakers this week that the draft virtual asset service law has passed the first cabinet review and may pass the third reading in the next session. Stablecoin-specific regulations are expected to follow within six months, starting at the earliest in late 2026.
Peng said the law does not limit issuers to banks, but the FSC and Taiwan’s central bank have agreed that financial institutions will lead the issuance in the early stages.
What is unclear is the backing of the currency. Stablecoins are digital tokens 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 Taiwan dollar depending on market demand, but no decision has been made.
A coin backed by the U.S. dollar would circumvent the most vexing problem in Taiwan’s financial system: severe restrictions on exporting Taiwanese currency overseas.
Taiwan’s currency cannot legally be circulated overseas, and the central bank has a long history of cracking down on attempts to use Taiwanese currency for transactions not directly connected to Taiwan.
Stablecoins, by design, facilitate cross-border payments, but this feature could undermine decades of efforts to keep currencies onshore and prevent informal offshore pricing.
Regulators are currently drafting rules based on full reserve backing, strict segregation of assets, and domestic storage requirements.
However, the fundamental question of what kind of 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 Taiwan’s monetary framework.