Taiwan Plans First Local Stablecoin by End-2026; Peg, Oversight and Reserve Rules Still Unclear

Taiwan’s Financial Supervisory Commission (FSC) is preparing rules for the country’s first locally issued stablecoin, targeting issuance by licensed financial institutions (likely commercial banks) by the second half of 2026 and formal rollout by end-2026. A draft Virtual Asset Service Provider (VASP) Act has cleared cabinet review and could pass the legislature soon; stablecoin-specific rules are expected within about six months after the bill advances. Regulators favour full-reserve backing, asset segregation and local custody of reserves. The key open issue is the peg — US dollar or New Taiwan dollar — which will shape cross-border use, onshore/offshore restrictions and central bank oversight. If pegged to USD, the token could facilitate cross-border settlement while avoiding some onshore NT$ constraints but may invite closer central bank scrutiny. Authorities highlight benefits such as safer retail payments, improved remittances and modernised rails, while seeking to mitigate risks around consumer protection, illicit finance and technological security. Market demand and timing will influence peg choice; credibility will depend on transparent reserve practices and custody arrangements. For traders: this moves Taiwan toward a regulated stablecoin model that could increase onshore institutional blockchain adoption and payment-use cases — watch peg decisions, reserve rules, and which banks win issuance licences, as they will determine regulatory burden, onshore liquidity effects and likely market acceptance.