Taiwan Set to Disrupt Crypto Markets with First Fully-Regulated Stablecoin by 2026

Asia's next fintech earthquake is brewing—Taiwan just signaled it'll beat Hong Kong and Singapore to the punch with a government-backed stablecoin.

The island's financial regulators are rolling out the red carpet for what insiders call 'a USD-pegged digital asset with full AML compliance'—because nothing screams decentralization like KYC paperwork.

Why this matters: While Wall Street still debates stablecoin frameworks, Taiwan's move could position it as the Switzerland of Asian crypto—assuming China doesn't throw a geopolitical wrench in the works.

Bonus jab: Because clearly, what crypto needed was more regulatory theater to complement its volatility.

Taiwan’s MiCA-influenced approach

Peng noted that the draft pulls ideas from the European Union’s Markets in Crypto-Assets Regulation, giving Taiwan a clear structure for managing digital assets. One point that caught attention is that the bill does not strictly require stablecoins to be issued by banks.

Even so, the FSC and the central bank have agreed that, at the start, only financial institutions will be allowed to issue them. Peng said this approach gives the project a safer foundation while the system is still new.

Currency peg remains undecided

A major question that still has no answer is what currency the stablecoin will follow. Peng said the token could be pegged to the U.S. dollar or the New Taiwan dollar (NTD), but no final choice has been made. A USD-backed option WOULD avoid Taiwan’s strict rules that keep the NTD from circulating offshore.

An NTD-backed version, however, would fit local usage but could challenge long-standing limits meant to prevent unofficial offshore pricing. Regulators are now drafting rules requiring full backing, separate customer assets, and local storage of funds.

Meanwhile, there is a growing political conversation about digital assets in Taiwan. Legislator Ko Ju-chun recently said Taiwan should think about adding Bitcoin to national reserves, arguing that global central banks may begin holding digital assets by 2030. He also asked the government to finish reviewing Bitcoin seized in criminal cases. Premier Cho Jung-tai promised updated information before the end of the year.

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