Taiwan is taking a wait-and-see approach to the fiat-backed digital currencies that are increasingly gaining acceptance in the global financial system.
In Taiwan, where regulators place a premium on financial stability and investor protection, interest in stablecoins is growing. Even so, consensus remains elusive on how fiat-backed cryptocurrencies should ultimately be used.
In a cryptocurrency and stablecoin adoption index of 121 countries published in October 2025 by the startup TRM Labs, Taiwan is ranked 47th.
Cheng Han, vice president of the semi-governmental Taiwan Academy of Banking and Finance (TABF), noted in an October 2025 commentary that “stablecoins are now being widely discussed [in Taiwan], yet without clear agreement on the direction these discussions should go. Thus, traders are optimistic, the government is cautious, traditional banks are concerned, and the public is largely unaware of the implications. Future application scenarios remain uncertain.”
In December 2025, Financial Supervisory Commission (FSC) Chairman Peng Jin-lun said that Taiwan’s domestic stablecoin could be launched as early as June or July 2026, depending on the progress of the draft Virtual Asset Service Act. The draft bill for virtual asset service providers would establish a regulatory framework for companies in the industry. It would require them to register or obtain licenses, meet capital and operational thresholds, implement anti-money laundering controls, and adhere to consumer protection and reporting requirements.
Peng said that the FSC and the Central Bank have agreed that stablecoin issuance would be restricted to licensed financial institutions. That restriction is necessary to manage risks and safeguard user funds, he said.
Zennon Kapron, director of the fintech consultancy GSL Insight, says Taiwan’s push into stablecoins reflects a focus less on crypto adoption than on upgrading payment systems while preserving regulatory control.
“A domestically regulated stablecoin gives Taiwan a compliant onshore alternative to offshore USD stablecoins for trading/settlement, a way to modernize cross-border settlement and B2B payments without relying on opaque offshore issuers, and a policy lever to keep stablecoin activity inside a supervised perimeter,” he notes.
Kapron says he believes that Taiwanese regulators, who tend to focus on risk mitigation, “want the utility of stablecoins without importing the governance risk of unregulated ones.”
While Taiwan is leaning in the direction of issuing stablecoins, it has not decided on what type to issue: USD-backed or NTD-backed.
“An NT dollar-denominated stablecoin is not unthinkable, but it would require more than tweaks to the market — it would mean reforming the trade-surplus model Taiwan has depended on for the past five decades, with deeper domestic bond markets, more competitive short-term rates, and substantial non-resident demand for NT dollar assets,” James Lee, a senior adviser at the semi-governmental Taiwan External Trade Development Council (TAITRA), said in an August 2025 Taipei Times commentary.
The greater opportunity for Taiwan, he added, lies in building on existing U.S. dollar–denominated networks, “which already operate faster, cheaper, and at a global scale in ways that are commercially viable and beneficial to Taiwan.”
GL Insight’s Kapron notes that Taiwan could consider issuing two separate stablecoins. “A Taiwan-dollar stablecoin is the cleaner policy choice — it supports local payments and keeps monetary control anchored to the Taiwan dollar, but it will have limited traction outside Taiwan,” he says.
A USD–denominated stablecoin may be more immediately useful for cross-border settlement and crypto market liquidity, but it also carries greater sensitivities, particularly around reserve management, foreign-exchange expectations, and concerns about “dollarization.”
“The pragmatic path is Taiwan dollars for domestic use and only a tightly ring-fenced U.S.-dollar version for institutional cross-border flows if regulators are comfortable policing the boundary,” Kapron says.
Central Bank Governor Yang Chin-long has struck a more cautious tone than the FSC. Speaking at a December news conference in Taipei, Yang signaled that the Central Bank is in no rush to move toward stablecoin issuance. While acknowledging their rapid adoption, he said fiat-backed virtual currencies do not yet “meet the standards needed to serve as pillars of the monetary system.” He added that stablecoins fall short of key criteria outlined by the Bank for International Settlements, including monetary unity, elasticity, and integrity.
Yang questioned whether Taiwanese consumers would adopt Taiwan dollar-backed stablecoins for real-world transactions. They might not see the benefits, he said.
The development of stablecoins backed by Taiwan’s currency would depend on market demand, regulatory clarity, and technological readiness, Yang said. He expects the first-use cases to be in virtual asset markets and real-world asset tokenization.
As for the USD-backed stablecoins that dominate the global market, Yang acknowledged that they offer speedy, inexpensive cross-border payments but added that they carry risks. The Central Bank’s wariness of stablecoins and push to be formally consulted on oversight “naturally slows the [rollout] process,” notes Kapron. “The delay is fundamentally legal and design-related, not technical,” he says.
