Taiwan Aims for Late-2026 Launch of Its First Domestic Stablecoin

Taiwan is setting its sights on launching its inaugural domestically issued stablecoin by late 2026, as lawmakers advance legislation aimed at regulating digital assets. However, critical design decisions, such as the currency the token will be based on, are yet to be resolved.

Key Takeaways:

Taiwan plans to release its first domestic stablecoin by late 2026, pending the approval of a new cryptocurrency law.
Initial issuance will be led by banks while regulatory bodies collaborate closely with Taiwan’s central bank.
The choice of peg remains uncertain; a stablecoin linked to the US dollar is considered easier to implement than one tied to the Taiwan dollar.

Local news outlets report that Peng Jin-long, chair of the Financial Supervisory Commission (FSC), informed lawmakers that the draft Virtual Assets Service Act has successfully passed initial cabinet reviews. It could secure its third reading in the next legislative session. Regulations specific to stablecoins are expected to be established within six months of this approval, possibly paving the way for a late-2026 launch.

Taiwan Aims for Late-2026 Launch of Its First Domestic Stablecoin

Banks to Lead Stablecoin Introduction Amid Regulatory Focus

The draft legislation does not restrict stablecoin issuance solely to banks. However, Peng emphasized that financial institutions will spearhead the initial rollout. This cautious strategy reflects the regulators’ approach as they begin to welcome domestic digital tokens.

The FSC is closely collaborating with the Central Bank of the Republic of China (Taiwan), which has historically maintained stringent controls to prevent the Taiwan dollar from being used outside its borders. This control is influencing discussions surrounding the stablecoin.

A stablecoin pegged to the Taiwan dollar would conflict with current foreign exchange regulations since the currency is not permitted to circulate internationally. Conversely, a US dollar-backed stablecoin would navigate major regulatory hurdles more effectively and align better with global usage, particularly in cross-border payments.

The primary advantage of stablecoins is their ability to facilitate swift and cost-effective value transfer across borders, potentially undermining decades of policies aimed at keeping the Taiwan dollar within the country and preventing unofficial offshore pricing.

Regulators are establishing guidelines that mandate full reserve backing, rigorous segregation of client assets, and domestic custody measures to limit risks as the stablecoin launches.

What remains unclear is the eventual choice of anchor currency. According to Peng, the final decision will hinge on market demand, with no binding commitment to either the US dollar or the Taiwan dollar at this time.

Taiwan Considers Adding Bitcoin to Its National Reserves

Additionally, reports indicate that Taiwan's government is considering integrating Bitcoin into its national reserve strategy. The Executive Yuan, alongside the Central Bank, has reached an agreement to assess Bitcoin as a potential strategic asset while also exploring pilot holdings of seized BTC that is currently awaiting auction.

In August, Taiwanese prosecutors charged 14 individuals involved in the nation's largest cryptocurrency money laundering operation, which resulted in a staggering NT$2.3 billion (approximately $75 million) fraud affecting over 1,500 victims through phony crypto exchange franchises.

Led by Shi Qiren, the operation managed over 40 storefronts under misleading names such as “CoinW” and “BiXiang Technology,” presenting themselves as licensed exchanges while secretly diverting investor funds into overseas cryptocurrency accounts.

Authorities confiscated cash, cryptocurrencies, and luxury items valued at over NT$100 million. Shi could face up to 25 years in prison for various offenses, including fraud, money laundering, and organized crime.

The group's success was largely due to exploiting gaps in regulatory oversight in Taiwan's cryptocurrency framework. By falsely claiming approval from the Financial Supervisory Commission, the network gained investor trust, charged hefty franchise fees, and utilized “deposit machines” to imitate legitimate exchange operations.

Prosecutors categorized the scheme as a “systematic fraud” that capitalized on Taiwan’s growing interest in crypto and lax enforcement.