Taiwan May Launch Its First Local Stablecoin in 2026; Biggest Uncertainty Is Whether It Will Be Pegged to the US Dollar or the New Taiwan Dollar

[BlockBeats] There are reports that Taiwan may see its first local stablecoin in the second half of 2026. But one unresolved question remains: should it be pegged to the US dollar or the New Taiwan dollar?

This week, FSC Chairman Huang Tien-lung revealed to legislators that the “Virtual Asset Service Act Draft” has passed a preliminary cabinet review, and it’s expected to complete the third reading in the next meeting. According to the plan, specific regulatory rules for stablecoins will be released within six months, so the earliest we could see the finished product go live is by the end of 2026.

Interestingly, the legislation itself does not restrict the issuer to banks only. However, the FSC and central bank have reached a consensus—the initial issuance still needs to be led by financial institutions.

The most critical disagreement now is over which currency to peg. Huang Tien-lung said it will be decided based on market demand, but no final decision has been made yet. This choice is no small matter.

If the US dollar is chosen, it cleverly sidesteps the thorniest issue in Taiwan’s financial system—strict offshore use restrictions on the New Taiwan dollar. Under current law, the New Taiwan dollar cannot circulate offshore, and the central bank has long tightly controlled any attempt at offshore trading. Stablecoins are inherently designed for cross-border settlements, which directly conflicts with Taiwan’s decades-long efforts to keep its currency onshore and prevent unofficial offshore pricing.

The current regulatory framework being drafted focuses on: full reserve backing, strict asset segregation, and local custody. How to ultimately balance innovation and control will depend on the ongoing regulatory debate.