Taiwan Revolutionizes Finance: New Law Allows Banks to Issue Stablecoins

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Taiwan Revolutionizes Finance: New Law Allows Banks to Issue Stablecoins

Taiwan’s Financial Supervisory Commission (FSC) is set to reshape the cryptocurrency landscape with a groundbreaking bill empowering banks to issue stablecoins. This move is part of a broader effort to regulate and innovate Taiwan’s financial ecosystem, making it a leader in fintech and blockchain adoption.


Stablecoin Legislation: A Game-Changer for Taiwan

Taiwan’s FSC is expected to introduce a pivotal bill in June 2025 that will authorize banks to issue stablecoins. These digital assets, pegged to commodities or traditional currencies like the US Dollar, are designed to maintain a stable value and facilitate seamless transactions.

Key highlights of the legislation include:

  • Stablecoin Issuance: Banks will gain legal authority to issue stablecoins under strict regulatory oversight.
  • Approval Requirements: All stablecoins issued in Taiwan will require FSC approval, ensuring compliance with reserve allocation and operational guidelines.

Bank Director Zhuang Yuyuan emphasized the need for clear regulations, citing that popular stablecoins like USDC and Tether (USDT) have not yet received regulatory approval in Taiwan. The new law will create a framework for their issuance and usage, potentially boosting the legitimacy of stablecoins within the country.


The Role of Banks and Future Crypto Plans

The FSC envisions a collaborative role for banks and the central bank in managing stablecoins. FSC Chairman Peng Jinlong highlighted the importance of co-management, ensuring stability and trust in these digital assets.

Key Announcements:

  1. Testing Crypto Custody Services: In early 2025, the FSC plans to pilot crypto custody services with local banks.
  2. Professional Investor Access: The FSC has also permitted professional investors to engage with foreign crypto exchange-traded funds (ETFs), expanding investment opportunities.

Peng stated:
“Banks will co-manage the stablecoins with the central bank, ensuring a robust and transparent framework for their issuance.”

These steps reflect Taiwan’s commitment to fostering a regulated and transparent cryptocurrency market, addressing concerns about security and compliance.


How the Bill Could Transform Taiwan’s Financial Ecosystem

The proposed legislation marks a significant leap forward for Taiwan’s crypto sector. By allowing banks to issue stablecoins, the country aims to:

  • Boost Innovation: Encourage the development of blockchain technologies and digital finance solutions.
  • Increase Transparency: Introduce a regulatory framework that ensures accountability and reduces risks associated with unregulated cryptocurrencies.
  • Promote Financial Inclusion: Enable easier access to stablecoins for businesses and individuals, fostering a more inclusive financial environment.

Last year, the FSC mandated all crypto companies to register, demonstrating its proactive approach to regulation. This new bill further cements Taiwan’s position as a forward-thinking player in the cryptocurrency space.


Setting a Regional Standard in Crypto Regulation

Taiwan’s innovative approach to integrating stablecoins into its financial system could inspire neighboring countries to adopt similar frameworks. By combining robust regulation with a focus on innovation, Taiwan is positioning itself as a regional leader in fintech and blockchain.

Should the bill succeed, it will:

  • Strengthen Taiwan’s Fintech Presence: Cement its reputation as a hub for financial innovation.
  • Promote Global Interest: Attract international investors and blockchain projects seeking a regulated and supportive environment.

Conclusion

Taiwan’s move to empower banks to issue stablecoins is a bold step toward modernizing its financial infrastructure and embracing the future of digital currencies. The collaboration between banks, the central bank, and the FSC sets the stage for a regulated, transparent, and innovative crypto ecosystem.

As the bill progresses, global eyes will be on Taiwan to see how it navigates the challenges of stablecoin implementation. If successful, Taiwan could emerge as a global leader in fintech, setting a benchmark for cryptocurrency regulation and innovation.

Stay tuned for more updates as Taiwan paves the way for a transformative financial future.

 

 

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