Taiwan’s Financial Supervisory Commission (FSC) is preparing to introduce a groundbreaking bill that will enable banks to issue their own stablecoins. This initiative aims to stabilize the value of cryptocurrencies by linking them to traditional commodities or currencies, representing a significant shift in Taiwan’s regulatory landscape.
What Will the New Legislation Entail?
The FSC plans to share the details of the bill targeting virtual asset service providers (VASP) in June, which will specifically empower banks to create stablecoins. These coins will maintain their value by being pegged to selected assets.
How Will Banks Collaborate with the Central Bank?
According to FSC Chairman Peng Jinlong, banks will play a crucial role in managing stablecoins together with the central bank. He further revealed that the FSC is set to pilot crypto custody services with local banks starting in early 2025.
- Stablecoins such as USDC and Tether remain unapproved by regulatory bodies.
- The FSC will oversee all stablecoin issuances and their respective reserves in Taiwan.
- Professional investors can now access foreign crypto exchange-traded funds (ETFs).
These developments are expected to enhance the regulatory framework and transparency of Taiwan’s cryptocurrency market. The passage of this bill could lead to significant changes in the country’s financial ecosystem, fostering a more innovative environment for cryptocurrencies.
Taiwan’s proactive stance in cryptocurrency regulation may inspire other nations in the region to adopt similar frameworks. The successful implementation of this bill could solidify Taiwan’s role as a leader in the fintech sector.
