Taiwan's Financial Supervisory Commission has indicated that nine supporting regulations for the newly passed Virtual Asset Service Act — including detailed stablecoin rules — could be formally introduced as early as the first quarter of 2027.

Speaking at the FinTechOn 2026 and Asia FinTech Alliance Summit in Taipei on Sept. 2, FSC Chairman Peng Jinlong noted that the global debate over virtual assets and stablecoins has shifted from whether they should be developed to how they should be properly regulated. That shift is visible across the region: Hong Kong's stablecoin ordinance took effect in 2025, Japan has operated a stablecoin regime under its Payment Services Act since 2023, and the United States enacted federal stablecoin legislation with the GENIUS Act in 2025, giving Taiwan's effort plenty of regulatory precedent to draw on.

Taiwan's legislature passed the Virtual Asset Service Act in its third reading on June 30, creating a licensing framework for crypto businesses and setting rules for stablecoin issuance. The FSC is now drafting the nine subsidiary regulations required to implement the legislation, Peng said, with stablecoin requirements forming part of that package and the regulator targeting the first quarter of next year for their publication and implementation.

Stablecoin rules move toward implementation

Once the law and its supporting regulations take effect, Peng expects Taiwan's virtual asset and stablecoin sector to enter a new stage under formal supervision.

The Virtual Asset Service Act requires crypto businesses to obtain FSC approval before operating, and covers exchanges, trading platforms, transfer providers, custodians, underwriters and lending businesses. Companies already registered under Taiwan's previous anti-money laundering regime have been granted a transition period to move into the licensing system.

Stablecoin issuers face a separate approval process involving both the FSC and Taiwan's central bank. Issuers must maintain full reserve backing, place reserve assets in trust, and comply with audit and disclosure requirements — an approach consistent with regimes in other jurisdictions that similarly anchor stablecoin oversight in full reserve backing and redemption rights.

As Crypto.news reported in July, the legislation moved Taiwan away from a system based largely on AML registration toward supervision covering operations, customer protection, cybersecurity, market conduct and financial reporting. The framework grew out of an FSC draft released in March 2025, which set out proposed licensing standards for virtual asset businesses and requirements for stablecoin issuers. Earlier proposals contemplated allowing banks to issue New Taiwan dollar-pegged stablecoins subject to regulatory approval.

Peng said rapid advances in artificial intelligence and blockchain technology are pushing Taiwan and other financial markets toward a model in which traditional finance, digital finance and blockchain-based finance operate side by side. Taiwan has taken a similar approach to AI regulation: the FSC has published six core principles and related guidelines for financial institutions using AI, and plans to expand work on AI-based fraud prevention and financial data applications while keeping risks under control.

Stablecoins emerge as an option for semiconductor payments

The stablecoin discussion has extended into Taiwan's semiconductor supply chain, where companies handle large volumes of international payments, trade financing and corporate treasury transactions.

Taiwan Semiconductor Industry Association executive director Lu Chaoqun said AI is driving rapid expansion in the global semiconductor business. Global semiconductor annual revenue approached $800 billion in 2025 and could exceed $1.5 trillion this year, according to Lu. He projected the industry could challenge $2 trillion in annual revenue within the next two to three years and potentially reach roughly $3 trillion by 2035, while Taiwan's semiconductor industry cluster is moving toward a scale of $1 trillion.

Taiwanese manufacturers assemble and ship about 90% of the world's AI servers and account for around 76% of global semiconductor foundry revenue, Lu said. Components and finished goods cross borders daily, generating payment, financing and capital management needs alongside the physical supply chain. Factories and logistics networks can operate around the clock, but international payments remain constrained by banking hours, time zones and settlement procedures.

As a result, stablecoins, blockchain technology and financial technology have become urgent infrastructure for supply-chain companies managing cross-border payments, trade financing and treasury operations, Lu said. He argued that financial institutions should act as partners to AI, semiconductor and technology companies rather than limiting themselves to providing financial services.

Programmable payments could connect supply chains

Taiwan FinTech Association Chairwoman Wang Li-ling said progress in AI, blockchain, stablecoins and programmable payments is bringing goods, information and money flows closer together within global supply chains. In such systems, AI could forecast demand while logistics systems adjust automatically, blockchain networks verify transactions and documents, and programmable payment systems release funds once agreed conditions are met.

For stablecoins, Wang said, the important part is not the "coin" but whether trust can be established behind the "stable" component. Stablecoins could make liquidity management more efficient for multinational businesses, shorten settlement periods for importers and exporters, and potentially lower payment costs for small and medium-sized businesses in emerging markets participating in international supply chains, she said.

Cross-border use, however, would require regulation extending beyond individual jurisdictions, Wang said. Reserve management, redemption, technology and regulatory standards would need sufficient cross-border trust, while greater use of AI in decisions involving goods, capital allocation and supplier risk would raise questions about data quality, cybersecurity, privacy, model governance and responsibility.

Taiwan has also been tightening the infrastructure around crypto transfers as the licensing system takes shape. In August, the FSC proposed expanded Travel Rule requirements for domestic virtual asset transfers, including additional identification requirements for transactions above NT$30,000. The regulator intends to extend the framework to transfers between Taiwanese and overseas virtual asset service providers by the end of 2027.

Financial institutions assess stablecoin opportunities

Cathay Financial Holdings senior executive vice president Sun Chih-te said digital assets and stablecoins have shifted from an area once treated as peripheral by traditional financial institutions to a new frontier of financial development. Large financial institutions can no longer remain outside the sector, he said, though mainstream adoption still faces issues involving market scale, regulation and customer experience.

Cathay is evaluating opportunities involving stablecoins, digital asset custody, cross-border payments and tokenization, according to Sun. The financial group also wants to examine potential expansion into digital asset lending and trading while studying applications across insurance, asset management, wealth management and securities businesses. Cross-border payments are among the applications Cathay considers most capable of reaching scale in the near term, and the company is evaluating the role it could play in such an ecosystem and which partners could participate.

Taiwan had been weighing a banking role in stablecoin issuance well before the Virtual Asset Service Act passed. An earlier FSC proposal envisioned locally issued stablecoins pegged to the New Taiwan dollar, with issuers subject to regulatory approval and oversight involving the central bank.

Sun said regulatory requirements must be clear and fair while leaving room for innovation alongside anti-money laundering, know-your-customer, security and compliance obligations. Restricting development to only the safest possible areas, he said, could leave projects stuck at the proof-of-concept stage.

Stablecoin-based cross-border payments would require a degree of regulatory coordination between markets so different systems can interoperate, according to Sun. Customer experience will ultimately determine whether digital asset products move beyond trials, he said: stablecoins and other digital asset services must deliver improvements in actual use, not merely offer faster, cheaper or more efficient transactions in theory.

"Getting to 90% is not enough," Sun said, arguing that the final 10% can determine whether an innovation remains a concept or becomes a mainstream solution.

Asia FinTech Alliance Chairwoman Tsai Yu-ling said the organization now connects 16 Asian markets and is working to help participating economies share experience and develop common solutions. Its newly launched AFA Awards will support fintech companies seeking expansion across those markets, giving selected businesses what Tsai described as a faster route into the alliance's 16-market network. How Taiwan's rules align with those neighboring regimes — and whether the cross-border coordination Sun and Wang describe materializes — will be a key question as the Q1 2027 deadline approaches.