- Taiwan banks may issue NTD-pegged stablecoins.
- FSC to propose a law in June 2025 for oversight.
- Stability and regulation will be key for crypto integration.
In a groundbreaking move towards integrating cryptocurrency with traditional finance, Taiwan’s Financial Supervisory Commission (FSC) is set to propose legislation that would enable local banks to issue stablecoins pegged to the New Taiwan Dollar (NTD).
This draft law, expected to be introduced in June 2025, aims to bridge the divide between fiat and digital currencies, enhancing investor access to the burgeoning crypto market.
According to recent reports from Money UDN, the FSC’s initiative is part of a broader framework under the “VASP Registration Regulations” which came into effect in January 2025. This framework is designed to regulate virtual asset service providers, ensuring they meet stringent anti-money laundering protocols and submit regular risk assessments.
The proposal for banks to issue stablecoins is seen as a pivotal step in this regulatory evolution, providing a more secure and regulated environment for cryptocurrency transactions.
The FSC emphasizes that all stablecoins issued within Taiwan will be under the joint management of the central bank, ensuring their stability and legitimacy.
Peng Jinlong, Chairman of the FSC, has highlighted the role of these stablecoins as a facilitator for investors, allowing them to move seamlessly between traditional and digital currencies.
However, the central bank’s Director, Zhuang Xiuyuan, has voiced concerns over existing stablecoins like Tether and USDC, criticizing their backing by non-government recognized assets. To address these issues, any new stablecoin in Taiwan will require explicit approval from the FSC, ensuring they meet specific qualifications regarding issuer credibility and reserve allocations.
Economic integration challenges
Despite the optimism surrounding the draft law, there are hurdles to overcome before stablecoins can be used for everyday transactions in Taiwan. Zhuang mentioned ongoing discussions regarding monetary policy and financial stability, indicating that the transition from a virtual to a “real” economy with stablecoins will be cautious and methodical.
This legislative push by Taiwan not only marks a significant step in cryptocurrency adoption but also sets a precedent for how nations might regulate digital currencies in the future.
As Taiwan navigates these waters, the world watches, potentially learning from its approach to integrating traditional banking with the new digital financial landscape.
