Taiwan could introduce its first government-approved stablecoin in the second half of 2026 at the earliest, Financial Supervisory Commission Chairman Peng Jin-long said Wednesday. The timeline depends on legislative approval of the Virtual Assets Service Act and subsequent regulatory preparation.
The bill must pass through the Legislative Yuan’s current session and be approved in the next session if it progresses smoothly, Peng told lawmakers at a legislative hearing. Once the FSC announces subordinate regulations, an additional six-month buffer period will follow before the law takes effect.
The Cabinet is scheduled to review the act this week, following three prior meetings that produced a “high level of consensus,” Peng said.
Taiwan’s regulatory framework for stablecoins has moved closer to implementation as government officials outlined a structured timeline for the country’s first regulated digital currency.
The draft bill draws on the European Union’s Markets in Crypto-Assets Regulation, Peng confirmed. While the legislation does not explicitly require stablecoins to be issued by financial institutions, the FSC and the central bank jointly agreed that only financial institutions will be permitted to issue them initially from a risk-management standpoint.
The regulatory framework will mandate full reserve backing, domestic asset custody, and clear separation between user assets and issuer funds. These requirements aim to protect users and align with Taiwan’s regulatory priorities.
Authorities have not finalized whether the stablecoin will be pegged to the Taiwan dollar or the U.S. dollar. Peng stated both options remain open depending on future market demand.
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The currency peg decision carries significant implications for Taiwan’s financial system. Taiwan restricts the offshore circulation of its currency, and the central bank enforces strict controls to prevent Taiwan dollar transactions abroad.
A Taiwan dollar-backed stablecoin could directly confront those controls and increase compliance risks, while a U.S. dollar peg may avoid that by aligning with existing global digital asset norms.
The structured regulatory approach reflects Taiwan’s cautious strategy toward virtual asset integration. By restricting initial issuance to established financial institutions, regulators aim to ensure the stablecoin enters the market under a fully developed compliance regime.
Taiwan expects the stablecoin to launch in the second half of 2026 if all steps proceed on time. The six-month preparation period following legislative approval will allow regulators to finalize operational standards, licensing rules, and supervisory procedures.
