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In order to enable local banks to issue stablecoins linked to the new Taiwan currency, the Taiwan Financial Supervisory Commission (FSC) intends to release a draft law in June 2025. The goal of this project is to encourage the usage of stablecoins in the financial ecosystem while developing a strong framework for virtual asset service providers (VASPs).
Chairman of the FSC, Peng Jinlong, highlighted the significance of stablecoins in bridging traditional fiat currencies and cryptocurrencies. He explained, “Stablecoins will be used as a bridge that connects the gap between fiat currencies and cryptocurrencies, making it easier for investors to access the crypto trading market.”
Unlike popular stablecoins such as Tether and USD Coin, which are pegged to the U.S. dollar, Taiwan’s stablecoins will be tied to the new Taiwan dollar. Moreover, these locally-issued stablecoins will be managed in collaboration with Taiwan’s central bank.
However, Zhuang Xiuyuan, Director of Taiwan’s central bank, criticized existing stablecoins like Tether and USD Coin, noting that they are not backed by government-issued guarantees. To ensure greater accountability, all Taiwan-based stablecoins must secure FSC approval before launch. Issuers will also need to meet specific criteria, including qualifications and token reserve allocations, as outlined in the forthcoming draft law.
Taiwan has already begun implementing stricter rules for virtual asset service providers. The “VASP Registration Regulations,” which took effect in January 2025, impose stringent anti-money laundering measures and require annual risk assessment reports from crypto exchanges, trading platforms, and custodians.