Taiwan’s Financial Supervisory Commission (FSC) is set to unveil a draft law in June 2025 that will allow local banks to issue stablecoins pegged to the New Taiwan Dollar (TWD).
The proposal is part of a broader framework aimed at regulating virtual asset service providers (VASPs), according to a report by local media outlet Money UDN.
FSC Chairman Peng Jinlong highlighted that stablecoins bridge traditional fiat currencies and digital assets, enhancing accessibility for cryptocurrency investors. Taiwan’s stablecoins will be linked to the New Taiwan Dollar, differentiating them from popular stablecoins like Tether and USD Coin, which are tied to the U.S. dollar and ensuring better alignment with Taiwan’s monetary system.
The Financial Supervisory Commission (FSC) and the central bank will jointly supervise all locally issued stablecoins in Taiwan. The central bank’s director raised concerns about stablecoins that claim to be backed by the U.S. dollar but are endorsed by private firms rather than government entities. A draft law will establish strict requirements for stablecoin issuance, including qualification standards for issuing firms and rules for token reserve allocation. Stablecoins must receive FSC approval before entering the market to ensure compliance.
The draft law in Taiwan marks progress in integrating stablecoins into the financial ecosystem, but their use for everyday transactions is still uncertain. The central bank must address challenges related to monetary policy stability and potential financial risks before stablecoins can be applied in real-world scenarios.
Notably, Taiwan is advancing its approach to digital assets with upcoming stablecoin legislation and plans to pilot cryptocurrency custody services through local banks. The Financial Supervisory Commission (FSC) announced a trial program for banks to provide secure storage solutions for digital assets starting in Q1 2025. Financial institutions must submit applications detailing the types of cryptocurrencies they will store, such as Bitcoin, Ether, and Dogecoin, as well as their target clientele.
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