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The Financial Supervisory Commission (FSC) of Taiwan, an independent authority regulating the financial markets, is set to propose a special bill that will allow banks to issue stablecoins. This legislation aims to facilitate the introduction of stablecoins, which are cryptocurrencies designed to maintain a stable value by being pegged to commodities or currencies.
Stablecoin Legislation
According to recent reports, the FSC is expected to present a bill concerning virtual asset service providers (VASP) in June. The proposed bill will grant banks the authority to issue stablecoins, aiming to keep their value stable based on specific commodities or currencies.
Bank Director Zhuang Yuyuan pointed out that stablecoins like USDC, linked to the US Dollar, and Tether (USDT) have not yet received approval from authorities. Once the law takes effect, the FSC will need to approve all stablecoins issued in Taiwan, along with the institutions that issue them and their reserve allocations.
The Role of Banks and Future Plans
FSC Chairman Peng Jinlong stated that banks will co-manage stablecoins alongside the central bank. He also announced plans for the FSC to test crypto custody services with local banks in the first quarter of 2025.
“Banks will co-manage the stablecoins with the central bank.” – Peng Jinlong.
Last year, the regulatory body mandated all crypto-based companies to register by September to avoid severe penalties. Now, the organization allows professional investors to invest in foreign crypto exchange-traded funds (ETFs).
These developments are viewed as significant steps toward making Taiwan’s crypto markets more regulated and transparent. With the approval of the new bill, substantial changes in the financial ecosystem of the country are anticipated.
Taiwan’s initiatives stand out in promoting the acceptance of cryptocurrencies and supporting financial innovation. There is keen interest in how the process of banks issuing stablecoins will unfold following the implementation of the bill.
Finally, Taiwan’s financial regulations and cryptocurrency policies could serve as an example for other countries in the region. The successful enactment of this bill may strengthen Taiwan’s position in the fintech space.
