Taiwan is preparing to allow stablecoins into its financial system and plans to limit early issuance to banks. As policymakers move closer to formal legislation, a key question has emerged. Should regulated stablecoins be pegged to the New Taiwan Dollar (NTD) or the U.S. dollar?
The issue was raised at a forum on stablecoins and international trade hosted by the Taiwan External Trade Development Council (TAITRA) on December 15. Regulators and industry leaders discussed how digital currencies could reduce cross border payment costs for Taiwanese businesses.
International payment fees can reach as high as 5%, often hidden across multiple layers in the form of outgoing and incoming wire fees as well as charges by intermediary banks. A USD-pegged stablecoin could ease cross border payments and sidestep restrictions on offshore circulation of the NTD, while an NTD-linked token would align more closely with Taiwan’s domestic payment ecosystem.
Taiwan dollar stablecoins as a “dark horse”
Alex Liu, CEO of MaiCoin and a board member of the Taiwan Virtual Asset Service Provider Association, said a local currency stablecoin has the potential to support the next phase of Taiwan’s economic growth.
“It’s no surprise that payment providers are paying very close attention to stablecoins,” said Liu. “They offer the promise that those fees can come down in a market which mirrors the traditional FX market.”
Liu stressed that the role of an NTD stablecoin would be functional rather than speculative, designed primarily for efficiency and risk management. He cited recent currency swings tied to U.S. tariff announcements as evidence that Taiwanese exporters face growing exposure to exchange rate volatility.
According to Liu, Taiwan dollar stablecoins will eventually become a standard payment tool, noting that the currency already functions as a quasi-stable instrument.
“The Taiwan dollar is already, in some ways, one of the world’s largest U.S. dollar stablecoins,” Liu said. “It’s backed by roughly $600 billion in U.S. dollar-denominated assets.”
Liu described Taiwan’s stablecoin industry as a “dark horse,” pointing to the island’s strong capital markets. Taiwan’s stock market recently entered the global top 10 by market capitalization, placing it alongside economies such as Switzerland and Germany.
“Taiwan’s capital market is punching above its weight,” he said.
The highly anticipated stablecoin legislation
These debates are unfolding as Taiwan prepares its first comprehensive stablecoin regulatory framework. Taiwan’s initial stablecoin will be regulated under the proposed draft Virtual Asset Service Providers Act, which is currently under review by the Cabinet. After intergovernmental agencies provide input, the Executive Yuan is expected to submit the bill to the Legislative Yuan for formal legislative consideration.
At the conference, Hsou-Yuan Chung, vice chairperson of Taiwan’s Financial Supervisory Commission (FSC), said the legislation was drafted in response to stablecoins increasingly being viewed as payment infrastructure rather than speculative assets, particularly for cross border transactions.
“AML rules alone are no longer enough,” Chung said. “If industries are going to use digital assets for cross border payments, stability becomes the primary requirement.”
Chung said Taiwan’s stablecoin framework would require one-to-one fiat backing and explicitly exclude algorithmic models. She also noted that stablecoins issued in Taiwan would not be required to be pegged solely to the NTD and could be linked to other fiat currencies.
If deliberations proceed smoothly, the legislation could be passed in the first half of 2026.
Issuance rules and implementation model
Regulators are drawing a clear line between who may issue stablecoins and how they may function. Taiwan’s central bank has said the bank only issuance approach is intended to limit operational and supervisory risks during the early phase, not to transform stablecoins into deposit-like products.
Under the proposed framework, stablecoins would be prohibited from paying interest and required to be fully backed by liquid reserves, ensuring they function as payment instruments rather than substitutes for bank deposits.
Looking ahead to implementation, Alex Liu, CEO of MaiCoin and a board member of the Taiwan Virtual Asset Service Provider Association, said a Taiwan stablecoin would likely adopt a multi-issuer model similar to Hong Kong’s system, where several banks issue interchangeable Hong Kong dollar notes rather than allowing a single monopolistic issuer.
Exporters and trade impact
Liu emphasized that an NTD stablecoin should be treated as public infrastructure that helps Taiwanese exporters manage balance sheets and reduce unnecessary foreign exchange losses, particularly as global trade conditions become more volatile.