Taiwan will unveil a new draft law authorizing banks to issue stablecoins in June 2025. According to the Economic Daily, Taiwan’s Financial Supervisory Commission (FSC)intends to present a special legislative draft for virtual asset service providers (VASP) in June 2025, enabling banks to issue stablecoins for the first time.
The new rule will comes at a time when Taiwan has seen a rise in crypto adoption amid a higher demand in market participants.
What Will The New Bill Include?
Stablecoins will act as a link between fiat and virtual currencies, giving investors a trading entry point, according to FSC Chairman Peng Chin-long.
The FSC must authorize any stablecoins issued in Taiwan, including those with reserves and issuance standards. To make clear the difference from CBDC and evaluate the use of stablecoins in the actual economy, this policy will be overseen in tandem with the central bank.
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Taiwan Sees Rise in Crypto Support
As the number of users in Taiwan increases, the country is increasing its support for cryptocurrency. Previously, the country had announced that it will implement a cryptocurrency custody service through local banks within the next year.
The action may also increase expectations for improved institutional cryptocurrency use in the nation. It is an indirect attempt to introduce regulations into the decentralized market.
Taiwan’s Financial Supervisory Commission (FSC) is preparing to begin the institutional trial of custody services for cryptocurrencies in 2025.
Three private banks have expressed interest in joining the virtual asset custody market at this time, according to the nation’s Financial Supervisory Commission.
In addition to virtual asset exchanges, the banks intend to provide their services to professional institutional investors.
Taiwan Witnesses Rise in Crypto Users
Over the last three years, the number of cryptocurrency users in Taiwan has been steadily increasing. As the market has grown, the nation’s government has also made an effort to make the country as crypto-friendly as possible.
After the government recognized the potential of blockchain technology to boost the country’s economy, Taiwan, the seventh-largest economy in Asia, passed legislation that is beneficial to cryptocurrencies and blockchain companies.
Self-regulation of the local Blockchain sector is an early approach taken by Taiwanese government authorities to increase the effectiveness of the government’s market control powers.
Taiwan’s lack of FinTech market regulations has long been criticized by the global technology community. Nevertheless, Taiwan’s government has attempted to adopt innovative and relevant technologies, in contrast to Japan, which admitted its limitations in FinTech and cutting-edge technology.
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