Taiwan plans first locally issued stablecoin by H2 2026, initially via banks

Taiwan’s Financial Supervisory Commission (FSC) is moving to introduce the country’s first locally issued stablecoin by the second half of 2026. Draft virtual-asset legislation modelled on the EU’s MiCA framework — the proposed "Virtual Assets Service Act" — is being submitted for cabinet and legislative review and could enter a third reading soon. While the law would not formally restrict issuers, the FSC and Taiwan’s central bank favour an initial prudential phase permitting only regulated financial institutions (likely banks and licensed payment firms) to issue fiat‑pegged stablecoins. Regulators are finalising technical standards, reserve and audit rules, AML/KYC requirements, consumer-protection measures and issuer liability. The peg currency is undecided and could be the US dollar or Taiwan dollar depending on market demand. Stablecoin-specific rules are expected within six months after the act passes, with pilot projects and coordination planned with local banks and payment providers. FSC Chair Peng Jin-lung emphasised prudential supervision, consumer protection and alignment with international norms. For traders, the move signals stronger regulatory certainty for fiat‑pegged tokens in Taiwan, potential growth in regulated onshore stablecoin liquidity, and reduced legal risk for banks and licensed issuers — factors that can affect stablecoin flows, local crypto-fiat rails and regional payment use cases.