Taiwan Moves Toward 2026 Stablecoin Debut Under New Crypto Law: Report

At a legislative hearing, Peng said that the draft law, the Virtual Assets Service Act (VASA) should be placed on the agenda during the current session of Legislative Yuan, according to Focus Taiwan. If the bill passes smoothly through the legislative process, issuance of stablecoins could begin in the second half of 2026.

After VASA is adopted, the FSC will roll out subsidiary regulations. Peng said an additional six-month "buffer period" before taking effect will be required to give time for financial institutions and potential issuers to adapt.

Notably, the draft law “does not explicitly require stablecoins to be issued by financial institutions,” says Peng, although for risk-management reasons, the FSC and the central bank have agreed that only financial institutions will be permitted to issue stablecoins in the initial phase.

The push to introduce a locally issued stablecoin reflects the broader global trend. Many jurisdictions are racing to give legal clarity on crypto assets, in particular stablecoins, after a wave of high-profile failures and regulatory scrutiny in the last couple of years. By legislating now, Taiwan hopes to create a safe, supervised environment for stablecoin issuance rather than waiting for private actors to experiment outside regulation.

Furthermore, under VASA, Taiwan's approach may draw inspiration from frameworks including the Markets in Crypto‑Assets Regulation, or MiCA, of the European Union, a possibility Peng explicitly referenced.

Finally, allowing financial institutions to issue stablecoins early also speaks to a very cautious, risk-conscious approach; the government appears intent on controlling counterparty risk, ensuring proper oversight-perhaps prioritizing financial stability at the expense of rapid innovation.

Passing VASA and subsequent regulations mean that banks and licensed financial institutions would be in a position to gain first-mover advantage. They will be uniquely allowed to issue stablecoins at the beginning, which would expand their product offerings and customer appeal.

While interest from fintech startups or crypto exchanges is likely, the catch would be a need for partnership or to wait until regulations widen to include nontraditional financial players. The cautious path being taken up by the FSC suggests that the issuance of stablecoins will be starting in a tightly regulated environment.

A regulated stablecoin may provide a stable medium for digital transactions, particularly cross-border or in e-commerce, under the supervision of Taiwan's financial authorities. In contrast to unregulated cryptocurrencies, a stablecoin issued pursuant to VASA may offer more protection for investors in terms of transparency and predictability.

That said, prospective users should pay attention to the details-for instance, what type of collateral is going to back the stablecoin: fiat, reserves, or some other assets; whether issuance is limited to major institutions initially; and how AML/KYC rules will apply.

While the FSC seems ready to push the bill forward, the actual timeline largely depends on the legislative process. First of all, the VASA has to be placed on the Legislative Yuan's agenda, then pass committee review, general debate, and final vote. Delays or amendments could push the stablecoin launch further out.

Operational questions, also yet to be resolved or at least publicly clarified, pertain to the mechanism of support for the given stablecoin, regulatory compliance by issuers, oversight and audits, standards concerning consumer protection, how these assets will eventually combine with existing banking and payment systems in Taiwan.

While the initial limitation to financial institutions suggests prudence, it might slow broader innovation or limit the opportunities for the smaller fintechs or blockchain-native firms.

In 2025, Taiwan has continued to modernize its financial and labor frameworks. Early this year, the Ministry of Labor announced an increase in the monthly minimum wage to NT$29,500, effective from 1 January 2026 - the 10th consecutive annual increase.

That move underlined the wider commitment of the government to social equity in the face of increasing living costs. Now, with VASA and the issuance of stablecoins in prospect, the authorities seem to be doubling down on aligning domestic financial infrastructure with the evolving global norm for digital assets.

If everything goes well, in the second half of 2026, Taiwan will be ready to issue its first self-regulated stablecoin, serving as a potential cornerstone for further growth in fintech, e-commerce, and cross-border payments. But much depends on the passage of the Virtual Assets Service Act, subsequent draft regulations, and how quickly financial institutions can move under a tight regulatory framework. To be sure, for both consumers and businesses, the promise of a stable, regulated medium for digital assets could be hugely significant-but the implementation details are uncertain, as is the timing and scope.