Taiwan could begin implementing its new virtual asset and stablecoin regulatory framework as early as the first quarter of 2027, marking a significant shift toward formal oversight of the country’s digital asset sector.
According to a local report, Financial Supervisory Commission (FSC) Chairman Peng Jinlong said on September 2 that the regulator is drafting nine subsidiary regulations under the Virtual Asset Service Act, including detailed rules for stablecoins. The regulations could be formally announced and implemented in Q1 2027.
Taiwan tightens crypto oversight
Taiwan’s legislature passed the Virtual Asset Service Act in its third reading on June 30. The law establishes a licensing framework for virtual asset service providers and introduces a regulatory structure covering areas such as customer protection, cybersecurity, market conduct, and financial reporting.
The FSC is now developing the supporting rules needed to put the legislation into practice. Stablecoin requirements will be included in that package. Under the framework, crypto businesses will need FSC approval to operate. The rules cover exchanges, trading platforms, virtual asset transfer providers, custodians, underwriters, and lending businesses. Existing companies operating under Taiwan’s previous anti-money laundering registration system will also have to transition into the new licensing regime.
Stablecoin issuers will face a separate approval process involving both the FSC and Taiwan’s central bank. Issuers are expected to maintain full reserve backing, hold reserve assets in trust and meet audit and disclosure requirements.
The framework builds on proposals the FSC first outlined in a draft released in March 2025, which included licensing standards for virtual asset businesses and requirements for stablecoin issuers.
Stablecoins gain attention
The regulatory push comes as Taiwanese financial institutions and industry groups increasingly examine stablecoins for cross-border payments and corporate financial operations.
As per the report, Lu Chaoqun, executive director of the Taiwan Semiconductor Industry Association, said the rapid expansion of artificial intelligence is driving greater demand across Taiwan’s semiconductor supply chain.
Taiwanese manufacturers assemble and ship about 90% of the world’s AI servers and account for roughly 76% of global semiconductor foundry revenue, according to Lu. He shared the scale of the industry creates substantial cross-border flows involving payments, trade financing and corporate treasury management.
That creates a potential use case for stablecoins, particularly as manufacturing and logistics operations run continuously while conventional international payments remain affected by banking hours, time zones and settlement procedures.
Lu described stablecoins, blockchain and fintech as increasingly important infrastructure for cross-border payments, trade finance and corporate cash management.
Financial firms eye digital assets
Taiwan’s financial sector is also assessing where digital assets could fit into existing financial services. Sun Chih-te, senior executive vice president at Cathay Financial Holdings, said stablecoins and digital assets have moved closer to the mainstream agenda for traditional financial institutions. Cathay is evaluating opportunities in stablecoins, digital asset custody, cross-border payments and tokenization. It is also considering potential applications in digital asset lending and trading, as well as insurance, asset management, wealth management and securities.
Cross-border payments are viewed as one of the areas most likely to achieve broader adoption in the near term. However, Sun said regulatory clarity, market size and customer experience remain key hurdles. He also stressed that stablecoin systems operating across borders will require coordination between different jurisdictions.
Regulation challenges remain
The push toward stablecoin adoption is occurring alongside broader efforts to strengthen Taiwan’s digital asset infrastructure.
The FSC proposed expanded Travel Rule requirements in August, including additional identification requirements for certain virtual asset transfers 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.
The regulatory challenge will therefore extend beyond issuing and supervising stablecoins. Cross-border reserve management, redemption procedures, technology standards and compliance requirements will also need to work across jurisdictions.
Taiwan FinTech Association Chairwoman Wang Li-ling said the value of stablecoins ultimately depends on the trust supporting their stability. She argued that programmable payments, blockchain and AI could eventually bring financial flows closer to physical supply chains.
For businesses, that could mean automated payments triggered by agreed conditions, blockchain-based verification of transactions and faster liquidity management across international operations.
Q1 2027 marks the next phase
The FSC’s planned subsidiary regulations would provide the detailed rules needed to move Taiwan’s virtual asset framework from legislation toward implementation. If the timetable holds, the first quarter of 2027 could mark the beginning of a more structured regulatory environment for Taiwan’s crypto and stablecoin markets.
Financial institutions and technology companies are already assessing potential applications, particularly in cross-border payments and tokenization. The effectiveness of the framework will ultimately depend on how clearly the rules are implemented and whether they allow digital asset services to move beyond limited proof-of-concept projects.
Also Read: ASIC Warns Crypto Firms: Secure Licences by Sept 30 or Face Penalties
