Taiwan's Financial Supervisory Commission is preparing nine supporting regulations under its new Virtual Asset Service Act, with stablecoin rules expected to take effect in Q1 2027. According to reports from Crypto.news, Financial Supervisory Commission Chairman Peng Jinlong announced at the FinTechOn 2026 and Asia FinTech Alliance Summit in Taipei on September 2 that global discussions around virtual assets and stablecoins have moved from whether they should be developed to how they should be properly regulated. The legislation passed Taiwan's legislature in its third reading on June 30, establishing a licensing framework for crypto businesses and rules governing stablecoin issuance.
Under the new framework, stablecoin issuers face a separate approval process involving both the FSC and Taiwan's central bank. As reported by Crypto.news, issuers will be required to maintain full reserve backing, place reserve assets in trust and comply with audit and disclosure requirements. 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. Existing companies registered under Taiwan's previous anti-money laundering regime have been given a transition period to move into the licensing system.
The discussion around stablecoins is extending into Taiwan's semiconductor supply chain, where companies process large volumes of international payments, trade financing and corporate treasury transactions. According to Crypto.news, Taiwan Semiconductor Industry Association executive director Lu Chaoqun projected the global semiconductor industry could challenge $2 trillion in annual revenue within the next two to three years and potentially reach approximately $3 trillion by 2035. Taiwanese manufacturers assemble and ship roughly 90% of the world's AI servers and account for around 76% of global semiconductor foundry revenue. Industry executives see stablecoins and blockchain as potential infrastructure for payments and financing across Taiwan's semiconductor supply chain.
Taiwanese financial firms are assessing stablecoins for cross border payments, custody, tokenization and other digital asset services. According to Crypto.news, Cathay Financial Holdings senior executive vice president Sun Chih-te said digital assets and stablecoins have moved from an area once treated as peripheral by traditional financial institutions toward a new area of financial development. The financial group is evaluating opportunities involving stablecoins, digital asset custody, cross-border payments and tokenization, with cross-border payments considered most capable of reaching scale in the immediate future.
Taiwan FinTech Association Chairwoman Wang Li-ling said advances in AI, blockchain, stablecoins and programmable payments are bringing goods, information and money flows closer together within global supply chains. As reported by Crypto.news, under such systems, AI could forecast demand while logistics systems adjust automatically, blockchain networks verify transactions and documents, and programmable payment systems release funds when agreed conditions have been met. The framework developed from an FSC draft released in March 2025, which set out proposed licensing standards for virtual asset businesses and requirements for stablecoin issuers.
