Taiwan to Introduce Draft Law for Local Banks to Issue Stablecoins

The Taiwan Financial Supervisory Commission (FSC) plans to propose a draft law in June 2025, allowing local banks to issue stablecoins tied to the new Taiwan dollar.

Connecting Fiat Currencies and Cryptocurrencies

According to Chairman of the Taiwan FSC, Peng Jinlong, stablecoins will serve as a bridge between fiat currencies and cryptocurrencies, making it easier for investors to access the crypto trading market. In Taiwan’s case, locally-issued stablecoins will be pegged to the new Taiwan dollar instead of the U.S. dollar.

Peng emphasized that all locally-issued stablecoins will be jointly managed by the Taiwan central bank to ensure stability and security.

Regulatory Requirements and Approval Process

Director of the central bank in Taiwan, Zhuang Xiuyuan, expressed concerns about popular stablecoins like Tether and USD Coin, stating that they often claim to be legitimate U.S. dollar assets without government approval. To address this, the Taiwan FSC will require all future stablecoins to meet certain requirements, including:

  • Issuer firm qualifications
  • Token reserve allocation
  • Other stipulations outlined in the draft law

These requirements aim to ensure the stability and legitimacy of stablecoins issued by Taiwan firms.

Monetary Policy and Financial Stability

Zhuang noted that while stablecoins may facilitate transactions, there are still hurdles to overcome, such as monetary policy and financial stability, before they can be widely adopted for everyday transactions.

Taiwan’s Regulatory Framework

The Taiwan FSC has been actively developing its regulatory framework for virtual assets. In January 2025, the “VASP Registration Regulations” came into effect, regulating virtual asset service providers, including crypto exchanges, trading platforms, and crypto custodians.

Under these rules, VASPs must adhere to strict anti-money laundering protocols and submit annual risk assessment reports.

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