Taiwan stablecoin regulations could take effect in Q1 2027

Taiwan’s Financial Supervisory Commission has said nine supporting regulations for its new Virtual Asset Service Act, including detailed stablecoin rules, could be formally introduced as early as the first quarter of 2027.

Financial Supervisory Commission Chairman Peng Jinlong said at the FinTechOn 2026 and Asia FinTech Alliance Summit in Taipei on Sept. 2 that global discussions around virtual assets and stablecoins have moved from whether they should be developed to how they should be properly regulated.

Taiwan’s legislature passed the Virtual Asset Service Act in its third reading on June 30, establishing a licensing framework for crypto businesses and rules governing stablecoin issuance.

The FSC is now working on nine subsidiary regulations needed to implement the legislation, Peng said. Stablecoin requirements will form part of that package, with the regulator targeting the first quarter of next year for their publication and implementation.

Taiwan stablecoin rules move toward implementation

Once the new law and supporting regulations take effect, Peng expects Taiwan’s virtual asset and stablecoin sector to enter a new stage under formal supervision.

The Virtual Asset Service Act requires crypto businesses to obtain FSC approval before operating and covers exchanges, trading platforms, transfer providers, custodians, underwriters and lending businesses. Existing companies registered under Taiwan’s previous anti-money laundering regime have been given a transition period to move into the licensing system.

Stablecoin issuers face a separate approval process involving both the FSC and Taiwan’s central bank. Issuers will be required to maintain full reserve backing, place reserve assets in trust and comply with audit and disclosure requirements.

Crypto.news previously reported in July that the legislation moved Taiwan away from a system largely based on AML registration toward supervision covering operations, customer protection, cybersecurity, market conduct and financial reporting.

The framework developed from an FSC draft released in March 2025, which set out proposed licensing standards for virtual asset businesses and requirements for stablecoin issuers. Earlier proposals contemplated allowing banks to issue New Taiwan dollar-pegged stablecoins subject to regulatory approval.

Peng said rapid development in artificial intelligence and blockchain technology is pushing Taiwan and other financial markets toward a model in which traditional finance, digital finance and blockchain-based finance operate alongside one another.

Taiwan has taken a similar regulatory approach to AI. The FSC has published six core principles and related guidelines for financial institutions using artificial intelligence and plans to expand work involving AI-based fraud prevention and financial data applications while keeping risks under control.

Stablecoins emerge as an option for semiconductor payments

The discussion around stablecoins is extending into Taiwan’s semiconductor supply chain, where companies process large volumes of international payments, trade financing and corporate treasury transactions.

Taiwan Semiconductor Industry Association executive director Lu Chaoqun said AI is driving rapid expansion in the global semiconductor business. Global semiconductor annual revenue approached $800 billion in 2025 and could exceed $1.5 trillion this year, according to Lu.

He projected the industry could challenge $2 trillion in annual revenue within the next two to three years and potentially reach approximately $3 trillion by 2035. Taiwan’s semiconductor industry cluster, meanwhile, is moving toward a scale of $1 trillion.

Taiwanese manufacturers assemble and ship roughly 90% of the world’s AI servers and account for around 76% of global semiconductor foundry revenue, Lu said. Components and finished goods move across borders every day, creating payment, financing and corporate capital management requirements alongside physical supply chains.

Factories and logistics networks can operate around the clock, while international payments remain constrained by banking hours, time zones and settlement procedures.

Lu said stablecoins, blockchain technology and financial technology have consequently become urgent infrastructure for supply-chain companies handling cross-border payments, trade financing and treasury management. He argued that financial institutions should work as partners to AI, semiconductor and technology companies instead of limiting their role to providing financial services.

Programmable payments could connect supply chains

Taiwan FinTech Association Chairwoman Wang Li-ling said advances in AI, blockchain, stablecoins and programmable payments are bringing goods, information and money flows closer together within global supply chains.

Under such systems, AI could forecast demand while logistics systems adjust automatically, blockchain networks verify transactions and documents, and programmable payment systems release funds when agreed conditions have been met.

For stablecoins, Wang said the important part is not the “coin” but whether trust can be established behind the “stable” component.

She said stablecoins could make liquidity management more efficient for multinational businesses, shorten settlement periods for importers and exporters, and potentially lower payment costs for small and medium-sized businesses in emerging markets participating in international supply chains.

Cross-border use would require regulation extending beyond individual jurisdictions, Wang said. Reserve management, redemption, technology and regulatory standards would need sufficient cross-border trust, while the increased use of AI in decisions involving goods, capital allocation and supplier risk would raise questions involving data quality, cybersecurity, privacy, model governance and responsibility.

Taiwan has been tightening the infrastructure surrounding crypto transfers as the licensing system takes shape. In August, the FSC proposed expanded Travel Rule requirements for domestic virtual asset transfers, including additional identification requirements for transactions above NT$30,000.

The regulator intends to extend the framework to transfers between Taiwanese and overseas virtual asset service providers by the end of 2027.

Financial institutions assess stablecoin opportunities

Cathay Financial Holdings senior executive vice president Sun Chih-te said digital assets and stablecoins have moved from an area once treated as peripheral by traditional financial institutions toward a new area of financial development.

Large financial institutions can no longer remain outside the sector, he said, though mainstream adoption still faces issues involving market scale, regulation and customer experience.

Cathay is evaluating opportunities involving stablecoins, digital asset custody, cross-border payments and tokenization, according to Sun. The financial group wants to examine potential expansion into digital asset lending and trading while studying applications across insurance, asset management, wealth management and securities businesses.

Cross-border payments are among the applications Cathay considers most capable of reaching scale in the immediate future. The company is evaluating the role it could play within such an ecosystem and which partners could participate.

Taiwan had been considering a banking role in stablecoin issuance well before passage of the Virtual Asset Service Act. An earlier FSC proposal envisioned locally issued stablecoins pegged to the New Taiwan dollar, with issuers subject to regulatory approval and oversight involving the central bank.

Sun said regulatory requirements need to be clear and fair while providing room for innovation alongside anti-money laundering, know-your-customer, security and compliance obligations. Restricting development to the safest possible areas, he said, could leave projects stuck at the proof-of-concept stage.

Stablecoin-based cross-border payments would require a degree of regulatory coordination between markets so different systems can work together, according to Sun.

Customer experience will ultimately determine whether digital asset products move beyond trials, he said. Stablecoins and other digital asset services would need to deliver improvements in actual use, not simply offer faster, cheaper or more efficient transactions in theory.

“Getting to 90% is not enough,” Sun said, arguing that the final 10% can determine whether an innovation remains a concept or becomes a solution adopted by the mainstream market.

Asia FinTech Alliance Chairwoman Tsai Yu-ling said the organization now connects 16 Asian markets and is working to help participating economies share experience and develop common solutions. Its newly launched AFA Awards will support fintech companies seeking expansion across those markets, giving selected businesses what Tsai described as a faster route into the alliance’s 16-market network.