Countdown for the special law is underway, and it can be implemented within six months after the legal framework is completed.
As global digital finance competition becomes increasingly fierce, Taiwan is also facing a critical moment in the regulation and development of cryptocurrency. The Chairman of the Financial Supervisory Commission (FSC), Peng Jinlong, clearly revealed during his attendance at the Legislative Yuan's Finance Committee on December 3 that the highly anticipated 'Taiwan version stablecoin' is expected to be launched in the second half of 2026 at the earliest. This not only symbolizes the entry of Taiwan's virtual asset regulation into a new era of legalization but also indicates that the 'stablecoin national team' led by financial institutions is about to take shape.
The legalization process of Taiwan's virtual asset market has always been a focal point of high interest among industry, government, and academia. During a questioning session in the Legislative Yuan's Finance Committee, Financial Supervisory Commission Chairman Peng Jinlong provided a clear timeline regarding the legislative progress of the (Virtual Asset Service Act).
However, the passage of the bill's third reading is only the first step. Peng Jinlong further explained that after the parent law is passed, the Financial Supervisory Commission still needs to establish eight subsidiary laws, including the (Regulations for the Issuance of Stablecoins), based on the authorization of the special law. The buffer period for this legislative process is expected to take six months. In other words, if the legislative process goes smoothly, the relevant subsidiary laws could be completed in the first half of 2026, which means that the first batch of compliant stablecoins in Taiwan could officially enter the market as early as the second half of 2026.
This draft, regarded as the 'Constitution' of Taiwan's crypto industry, heavily references the EU's (Regulation on Markets in Crypto-assets) (MiCA) as well as the regulatory frameworks of the United States, Japan, Singapore, and Hong Kong. The draft clearly defines the legal status of stablecoins, viewing them as 'virtual assets pegged to fiat currency,' and requires issuers to establish and maintain sufficient reserve assets.
To ensure financial stability, any entity wishing to issue stablecoins within Taiwan must first apply for permission from the supervisory authority; if a stablecoin is issued overseas (such as a USD stablecoin), it must also obtain consent from the supervisory authority before conducting transactions in Taiwan. This series of regulations aims to build a safe, transparent, and internationally competitive virtual asset market in Taiwan.
Financial institutions will be prioritized for trial, but the currency pegging to either USD or TWD remains a dilemma.
In terms of the issuing entities of stablecoins, Taiwan has adopted a strategy of 'first stability, then openness.' Although the draft (Virtual Asset Service Act) references the EU MiCA regulations and does not explicitly restrict non-financial institutions from issuing stablecoins in the legal text, due to risk management considerations, the Financial Supervisory Commission and the Central Bank have reached a high degree of consensus: in the initial stage of the regulatory mechanism, priority will be given to allowing banks and other financial institutions to issue stablecoins.
Peng Jinlong emphasized that although the regulations do not exclude non-financial entities, considering the systemic risks that stablecoins may pose to the financial system, it is safer for highly regulated financial institutions to take the lead in trial implementations. Currently, some banks have expressed strong interest in issuing stablecoins, which also means that the first batch of stablecoins in Taiwan is highly likely to be led by the banking system, forming what is known as the 'stablecoin national team.'
However, the biggest challenge faced by this national team is determining which currency the stablecoin should peg to. Currently, regulatory authorities have not reached a conclusion on whether to issue a 'USD stablecoin' or a 'New Taiwan Dollar stablecoin.'
If pegging to the USD is chosen, the advantage lies in circumventing the most thorny issue in Taiwan's financial system: the restrictions on the offshore circulation of the New Taiwan Dollar. For a long time, the Central Bank has strictly controlled the circulation and trading of the New Taiwan Dollar offshore to maintain exchange rate stability and has made every effort to prevent the emergence of unofficial offshore pricing mechanisms.
Conversely, if the option is to issue a New Taiwan Dollar stablecoin, while it can meet the domestic needs for payments, transfers, and financial technology development, and even help defend digital sovereignty, it inherently possesses the characteristics of cross-border rapid settlement, which will directly challenge the Central Bank's decades-long foreign exchange control defenses.
However, finding a balance between promoting financial innovation and maintaining the independence of monetary policy will be the core challenge that the Financial Supervisory Commission and the Central Bank must resolve within the next six months.
Drawing on international regulatory trends, incorporating Bitcoin into national reserves has become a new topic.
Apart from the issuance plans for stablecoins, Taiwan's regulatory perspective is also closely monitoring global trends. From the recent (GENIUS Act) in the United States to the implementation of the EU's MiCA legislation, countries are accelerating the construction of regulatory fences around cryptocurrencies.
Taiwan's direction for amending the law clearly requires stablecoin issuers to conduct regular audits, deposit sufficient reserves, and report detailed issuance data and information disclosures to the supervisory authority. This is in line with the mainstream international regulatory logic, aiming to avoid a repeat of events like the TerraUSD decoupling collapse.
It is worth noting that as Donald Trump proposed the idea of 'Bitcoin as a national reserve' during the U.S. presidential election, this trend has also reached the Legislative Yuan in Taiwan. While discussing the stablecoin bill, KMT legislator Ge Rujun publicly called for the government to consider the possibility of including Bitcoin in national reserves. He pointed out that as Bitcoin's market value continues to rise, and more countries and institutions view it as a hedge against economic uncertainty, Taiwan should not isolate itself from this international trend.
Ge Rujun further urged the government to quickly investigate and address the Bitcoin assets seized by judicial authorities in criminal cases. In response, Executive Yuan Premier Su Tseng-chang promised to provide updated information and research results by the end of the year. This shows that the Taiwanese government is no longer merely addressing the issue of virtual assets with a focus on preventing fraud and regulation, but is also beginning to passively or actively consider how to incorporate these emerging assets into national strategic resources.
Overall, with the timeline for 2026 established, the outline of Taiwan's virtual asset market is gradually becoming clear. From the revision of regulations, the establishment of issuing entities, to discussions on currency selection and national reserves, Taiwan stands at the crossroads of digital financial transformation. In the next year and a half, the passage of the bill and the implementation of subsidiary laws will directly determine whether Taiwan can secure a place in the global Web3 landscape.
This article is authorized for reprinting from (Crypto City)
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