Taiwan’s Financial Supervisory Commission (FSC) says regulations covering stablecoins and other virtual-asset services could be formally published and implemented in the first quarter of 2027, as the country moves towards a licensing system for the cryptocurrency industry.
The FSC is preparing nine supporting regulations under Taiwan’s new Virtual Asset Service Act. The package will include detailed requirements for stablecoin issuers and is expected to be introduced as early as the first quarter of next year.
Financial firms in Taiwan are already examining possible uses for stablecoins, including cross-border payments, digital-asset custody, tokenisation and other services. Industry leaders also believe stablecoins and blockchain technology could become important infrastructure for payments and financing across the country’s semiconductor supply chain.
Speaking at FinTechOn 2026 and the Asia FinTech Alliance Summit in Taipei on 2 September, Financial Supervisory Commission Chairman Peng Jinlong said international discussions had moved beyond whether virtual assets and stablecoins should be developed.
The main question now, he said, was how they should be regulated properly.
Taiwan’s legislature passed the Virtual Asset Service Act at its third reading on 30 June. The law establishes a licensing framework for cryptocurrency businesses and introduces rules governing the issuance of stablecoins.
Peng said the FSC was now drafting the nine subsidiary regulations required to put the law into operation. Stablecoin requirements will be included, with publication and implementation targeted for the first quarter of 2027.
Once the law and its supporting rules are in force, Peng expects Taiwan’s virtual-asset and stablecoin industries to enter a new phase of formal supervision.
Under the Act, crypto businesses must receive FSC approval before operating. The legislation covers exchanges, trading platforms, transfer providers, custodians, underwriters and lending businesses. Companies already registered under Taiwan’s previous anti-money laundering regime have been given a transition period to enter the new licensing system.
Stablecoin issuers will face a separate approval process involving both the FSC and Taiwan’s central bank. They will have to maintain full reserve backing, hold reserve assets in trust and meet audit and disclosure requirements.
The new framework moves Taiwan away from a system focused largely on anti-money-laundering registration and towards wider supervision of business operations, customer protection, cybersecurity, market conduct and financial reporting. It developed from an FSC draft published in March 2025, which set out proposed licensing standards for virtual-asset businesses and requirements for stablecoin issuers.
Earlier proposals considered allowing banks to issue stablecoins pegged to the New Taiwan dollar, subject to regulatory approval.
Peng said the rapid development of artificial intelligence and blockchain technology was pushing Taiwan and other financial markets towards a model in which traditional finance, digital finance and blockchain-based finance operate alongside one another.
Taiwan has adopted a similar approach to artificial intelligence. The FSC has published six core principles and related guidance for financial institutions using AI, and plans to expand its work on AI-based fraud prevention and financial-data applications while keeping risks under control.
Semiconductor supply chain considers stablecoin use
The stablecoin debate is also spreading into Taiwan’s semiconductor industry, where companies handle large volumes of international payments, trade financing and corporate treasury transactions.
Taiwan Semiconductor Industry Association executive director Lu Chaoqun said AI was driving rapid growth in the global semiconductor sector. Global annual semiconductor revenue approached $800bn in 2025 and could exceed $1.5tn this year, according to Lu.
He forecast that the industry could challenge $2tn in annual revenue within the next two to three years and potentially reach about $3tn by 2035. Taiwan’s semiconductor industry cluster, meanwhile, is moving towards a scale of $1tn.
Taiwanese manufacturers assemble and ship about 90% of the world’s AI servers and account for roughly 76% of global semiconductor foundry revenue, Lu said.
Components and finished products cross borders every day, creating demands for payments, financing and corporate capital management alongside the physical movement of goods. Factories and logistics networks can work continuously, but international payments remain affected by banking hours, time zones and settlement procedures.
Lu said stablecoins, blockchain and financial technology had therefore become urgent infrastructure for companies handling cross-border payments, trade finance and treasury management. He argued that financial institutions should act as partners to AI, semiconductor and technology companies rather than limiting themselves to conventional financial services.
Taiwan FinTech Association Chairwoman Wang Li-ling said developments in AI, blockchain, stablecoins and programmable payments were bringing the movement of goods, information and money closer together across global supply chains.
In such systems, AI could forecast demand, logistics networks could adjust automatically, blockchain could verify transactions and documents, and programmable payments could release funds once agreed conditions had been met.
For stablecoins, Wang said the key issue was not the “coin” but whether confidence could be established in the “stable” element behind it.
She said stablecoins could improve liquidity management for multinational companies, shorten settlement times for importers and exporters and potentially reduce payment costs for small and medium-sized businesses in emerging markets involved in international supply chains.
However, cross-border use would require regulation extending beyond individual jurisdictions. Wang said reserve management, redemption, technology and regulatory standards would all need sufficient international trust.
The growing use of AI in decisions concerning goods, capital allocation and supplier risk would also raise questions about data quality, cybersecurity, privacy, model governance and accountability.
Taiwan has continued to strengthen the infrastructure surrounding crypto transfers as its licensing system develops. In August, the FSC proposed expanding Travel Rule requirements for domestic virtual-asset transfers, including additional identification requirements for transactions above NT$30,000.
The regulator plans to extend the framework to transfers between Taiwanese and overseas virtual-asset service providers by the end of 2027.
Financial firms weigh digital-asset opportunities
Cathay Financial Holdings senior executive vice-president Sun Chih-te said digital assets and stablecoins had moved from being treated as a peripheral issue by traditional financial institutions to becoming a potential new area of financial development.
Large financial institutions could no longer remain outside the sector, he said, although wider adoption still faced challenges involving market size, regulation and customer experience.
Cathay is assessing opportunities in stablecoins, digital-asset custody, cross-border payments and tokenisation. The group also wants to examine possible expansion into digital-asset lending and trading, while studying applications in insurance, asset management, wealth management and securities.
Sun said cross-border payments were among the applications most likely to achieve scale in the immediate future. Cathay is considering what role it could play in that ecosystem and which partners might be involved.
Taiwan had been considering a role for banks in stablecoin issuance before the Virtual Asset Service Act was passed. An earlier FSC proposal envisaged locally issued stablecoins pegged to the New Taiwan dollar, with issuers subject to regulatory approval and oversight involving the central bank.
Sun said regulation needed to be clear and fair, while allowing innovation alongside anti-money-laundering, know-your-customer, security and compliance obligations. He warned that restricting development only to the safest possible areas could leave projects permanently at the proof-of-concept stage.
Cross-border payments based on stablecoins would also require a degree of coordination between markets so that different regulatory systems could work together, Sun said.
Ultimately, he added, customer experience would determine whether digital-asset products moved beyond trials. Stablecoins and other services would need to deliver tangible improvements rather than merely promise faster, cheaper or more efficient transactions in theory.
“Getting to 90% is not enough,” Sun said, arguing that the final 10% could decide whether an innovation remained a concept or became a mainstream solution.
Asia FinTech Alliance Chairwoman Tsai Yu-ling said the organisation now connects 16 Asian markets and is helping participating economies share experience and develop common solutions.
Its newly launched AFA Awards will support fintech companies seeking to expand across those markets by giving selected businesses what Tsai described as a faster route into the alliance’s 16-market network.
