Taiwan to Let Financial Institutions First Issue Stablecoins; Launch Possible by June–July 2026
Taiwan’s Financial Supervisory Commission (FSC) chair Peng Jin-long said the draft Virtual Asset Service Provider (VASP) law, which includes a chapter on stablecoin issuance and supervision, has been submitted for executive review. Under the FSC’s proposed two-stage regulatory approach, the first phase restricts stablecoin issuers to licensed financial institutions to prioritize risk management. If the VASP bill is sent to and passed by the Legislative Yuan in the next session and FSC subsidiary regulations (sub-laws) are completed on schedule, the first Taiwan-regulated stablecoins could launch as early as June–July 2026. Key timeline points: FSC submitted the VASP draft to the Executive Yuan on 2025-06-27; inter-agency review followed on 2025-07-25; Peng stated on 2025-12-03 that, pending legislative approval and sub-law completion, the FSC could finalize implementation within about six months. Market impact centers on clearer regulatory paths, issuer limitations to banks and financial firms, and timing uncertainty tied to legislative progress.
Neutral
The announcement reduces regulatory uncertainty by clarifying that stablecoins will be regulated under the VASP framework and initially issued by licensed financial institutions. Clear rules and institutional issuers are constructive for market credibility and institutional adoption, which is typically bullish over the medium-to-long term. However, restricting issuance to financial institutions limits rapid decentralised stablecoin innovation and supply, and the actual launch timing depends on legislative approval and subsidiary regulations—factors that introduce execution risk and short-term uncertainty. Historical parallels: jurisdictions that clarified stablecoin rules (e.g., New York’s earlier regulated frameworks) improved institutional participation but did not immediately trigger broad retail rallies; conversely, aggressive restrictions or delays have sometimes weighed on associated on‑ramps. Therefore, expect neutral to mildly bullish medium-term effects on crypto market stability and institutional flows, but possible short-term volatility around legislative milestones and sub-law announcements. Traders should watch legislative calendar, FSC sub-law releases, and any announcements naming specific issuer banks or technical standards—these events can create tradable volatility.