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Taiwan's Authority Set to Launch First Regulated Stablecoin by 2026

Taiwan is on the brink of introducing its first regulated stablecoin, potentially set to launch in late 2026.

The Financial Supervisory Commission (FSC) has informed lawmakers that the draft Virtual Assets Service Act has successfully cleared initial cabinet reviews.

This legislation aims to establish a regulatory framework for stablecoins, with further regulations expected to follow within six months.

Initial issuance will likely be led by financial institutions, though the act does not confine issuers to banks alone.

A crucial aspect still undecided is the currency to which the stablecoin will be pegged, whether the U.S. dollar or the Taiwan dollar.

A U.S. dollar-backed stablecoin could circumvent current restrictions on the export of Taiwan's currency, which is heavily regulated.

The primary concern is that a stablecoin designed for cross-border transactions could challenge Taiwan's existing currency policies.

Regulatory focus will include ensuring full reserve backing and strict asset segregation for the new stablecoin.

Ultimately, the chosen backing currency will influence whether the stablecoin serves as a safe payment tool or becomes a source of tension within Taiwan's financial system.

As developments unfold, the outcome could significantly impact both local and global cryptocurrency ecosystems.