Taiwan is making a decisive move to introduce its first fully regulated stablecoin, targeting a launch in the second half of 2026. The plan depends on the passage of the Virtual Asset Service Provider (VASP) Act, which has already passed a cabinet review and awaits legislative approval in the upcoming session.
If the bill clears its third reading, specific rules for stablecoins could be established within six months. Only financial institutions, primarily banks, will be permitted to issue the stablecoin, ensuring trust and integration with the traditional financial system. However, a key detail remains unresolved: whether the stablecoin will be pegged to the U.S. dollar (USD) or the New Taiwan dollar (TWD), a decision that will significantly impact its adoption and utility.
The regulatory framework is heavily influenced by the EU's MiCA regulation, emphasizing governance standards, reserve transparency, and issuer accountability. Authorities have outlined a phased approach, including a six-month buffer period after the law's enactment to finalize operational standards and risk controls. This initiative aims to modernize Taiwan's payment infrastructure, enhance financial inclusion, and position the island as a forward-thinking regulator in Asia's competitive fintech landscape.
