Taiwan may see its first locally issued stablecoin come online in the second half of 2026, although regulators have yet to decide which currency the token will be pegged to.
Local media in Taiwan reported that Financial Supervisory Commission Chairman Peng Jinlong told lawmakers this week that the draft virtual asset services law has passed preliminary review by the cabinet and may pass third reading at the next session. Specific regulations for stablecoins will be introduced within six months, possibly as early as the end of 2026.
Peng said that although the Financial Supervisory Commission and Taiwan’s central bank have agreed that financial institutions will lead the issuance in the initial stage, the legislation does not limit the issuer to banks.
What remains unclear is the monetary backing: a stablecoin is a digital token whose value is tied to the value of a real-world asset such as fiat currency. Peng said the stablecoin may be pegged to the U.S. dollar or New Taiwan dollar, depending on market demand, but a decision has not yet been made.
A dollar-backed coin would bypass the most thorny issue in Taiwan’s financial system: tight restrictions on offshore exports of Taiwan dollars.
The Taiwan dollar cannot legally circulate offshore, and the central bank has long tried to use it for transactions not directly linked to Taiwan.
Stablecoins are designed to facilitate cross-border settlements, a feature that could undermine decades-old efforts to keep currencies within borders and prevent unofficial offshore pricing.
Regulators are currently drafting rules based on full reserve backing, strict asset segregation and domestic custody requirements.
But the fundamental question of what currency Taiwan’s first stablecoin will represent remains unresolved, and the choice will determine whether the project becomes a low-risk payment instrument or a challenge to Taiwan’s monetary framework.
