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Coinpaper 2025-12-16 13:08:25

Taiwan Stablecoin Regulation 2026: NTD vs USD Pegging Debate Explained

Taiwan's financial authorities are advancing plans to integrate stablecoins into the nation's banking system. A central debate has emerged over whether these digital tokens should be pegged to the New Taiwan Dollar or the U.S. dollar. The question took center stage at a forum organized by the Taiwan External Trade Development Council on December 15. Regulators and industry executives examined how digital currencies could lower transaction costs for businesses engaged in international commerce. Cross-Border Payment Challenges Drive Stablecoin Interest International payment fees currently burden Taiwanese exporters with costs reaching 5% per transaction. These charges accumulate through outgoing wire fees, incoming transfer costs, and intermediary bank commissions. A U.S. dollar-pegged stablecoin could streamline cross-border settlements while avoiding regulatory restrictions on the circulation of offshore NTDs. An NTD-linked token would integrate more seamlessly with Taiwan's domestic payment infrastructure. Alex Liu, CEO of MaiCoin and board member of the Taiwan Virtual Asset Service Provider Association, argued that a local currency stablecoin could support Taiwan's economic expansion. Payment providers are closely monitoring stablecoin development as these instruments promise significant fee reductions in markets that mirror traditional foreign exchange trading. Liu emphasized that an NTD stablecoin would serve functional purposes rather than speculative trading. The tool would primarily address efficiency improvements and risk management concerns. Recent currency fluctuations linked to U.S. tariff announcements have increased exchange rate exposure for Taiwanese exporters. Taiwan dollar stablecoins will eventually become standard payment instruments, according to Liu. He noted that the currency already operates as a quasi-stable asset backed by approximately $600 billion in U.S. dollar-denominated holdings. Liu characterized Taiwan's stablecoin sector as a ”dark horse” in global digital finance. The island's capital markets have recently entered the top 10 worldwide by market capitalization, ranking alongside Switzerland and Germany. Taiwan's financial markets are performing beyond expectations relative to the nation's economic size. Regulatory Framework Takes Shape Taiwan is preparing its first comprehensive stablecoin legislation. The proposed Virtual Asset Service Providers Act is currently under Cabinet review. Government agencies will provide input before the Executive Yuan submits the bill to the Legislative Yuan for formal consideration. Hsou-Yuan Chung, vice chairperson of Taiwan's Financial Supervisory Commission, explained that regulators drafted the legislation after recognizing stablecoins as payment infrastructure rather than speculative instruments. This shift reflects their growing role in cross-border transactions.

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