Taiwan Central Bank Weighs Foreign-Exchange Rules for U.S. Dollar Stablecoins
Taiwan formally brought virtual assets within its legal regulatory framework after the Legislative Yuan passed the Virtual Asset Service Act on its third reading. The legislation marks an important milestone for the country’s fintech development and signals an increasingly blurred line between cryptocurrencies and traditional finance. To guard against disruption to the domestic currency and foreign-exchange markets and preserve financial stability, regulators must quickly clarify how virtual currencies will be classified and which authorities will oversee them.
Central Bank Governor Yang Chin-long said in July 2026 that the bank planned to regulate U.S. dollar stablecoins along the lines of foreign-exchange controls. He also argued that stablecoins should eventually be issued by banks to manage risk. New Taiwan dollar stablecoins would be easier to regulate because they fall within the domestic currency regime. Although the central bank continues to pursue reserve tokenization, it currently sees no need to use a central bank digital currency for the final settlement of stablecoins.
All Coverage
1 original reportsThe Backstory
The history behind this eventTSMC Could Pay Dollar Dividends as Taiwan Central Bank Weighs Stablecoin Oversight
Foreign investors hold a large share of Taiwan-listed stocks, and leading companies such as TSMC pay hundreds of billions of New Taiwan dollars in dividends each year. Concentrated foreign-currency outflows by overseas investors often cause sharp swings in the New Taiwan dollar. To reduce currency-conversion friction, the Financial Supervisory Commission is allowing listed and over-the-counter companies to pay dividends in foreign currencies. The potential impact of foreign-currency stablecoins on Taiwan’s financial system has also become a regulatory focus for the central bank following passage of the Virtual Asset Service Act.
The Financial Supervisory Commission formally approved the “TSMC clause,” allowing listed and over-the-counter companies to choose to pay dividends in U.S. dollars from 2027. Central Bank of the Republic of China (Taiwan) Governor Yang Chin-long said the policy would help streamline currency conversion for foreign investors and stabilize fluctuations in the New Taiwan dollar. Addressing the newly passed Virtual Asset Service Act, Yang said foreign-currency stablecoins are subject to the laws of their issuing jurisdictions and are therefore relatively difficult to regulate. The central bank will continue to assess the issue cautiously.
Taiwan Banks Eye Stablecoins, Crypto Custody Under New Law
Taiwan’s Virtual Asset Service Act establishes a regulatory framework for New Taiwan dollar-denominated stablecoins and gives banks a clearer basis for entering digital-asset businesses. Stablecoins could reduce settlement friction in cross-border remittances and corporate payments while serving as transaction instruments for real-world asset tokenization, or RWA, making them a central focus as lenders assess their next stage of digital-finance expansion.
Following the law’s implementation, Taiwanese banks are evaluating two main opportunities: virtual-asset custody and stablecoin-related financial services. No specific launch dates or investment amounts have been disclosed. Banks see potential uses in remittances, business payments and RWA transactions, but remain cautious about whether reserve assets will be sufficiently transparent and whether market liquidity can support reliable redemption and large-value transfers.
Subscribe to Mark Radar Weekly
Every Friday, the week's strongest signals in your inbox. Unsubscribe anytime.
If you search news on Google, you can set Mark Radar as a preferred source—our coverage will show up more often in your results. Set as preferred source on Google →