The independent government agency regulating Taiwan’s financial markets will reportedly propose a special law that will allow banks to issue stablecoins.
The United Daily News reports that Taiwan’s Financial Supervisory Commission (FSC) plans to submit the draft legislation on virtual asset service providers (VASPs) in June.
The bill includes a provision that will give banks the authority to issue stablecoins—crypto assets designed to maintain a stable value by being pegged to a commodity or currency, or regulated by an algorithm.
Bank director Zhuang Yuyuan says the stablecoins circulating in the market, including the dollar-pegged USDC and Tether (USDT), are not approved by the authorities.
The situation is anticipated to change once the law takes effect as the FSC will have to greenlight all stablecoins issued in Taiwan, along with their issuer and reserve allocations.
FSC Chairman Peng Jinlong says banks will jointly manage the stablecoins with the central bank.
The FSC is also set to run a trial of crypto custody services with local banks in the first quarter of 2025.
Last year, the regulator mandated all crypto-based companies to register by September or face harsh penalties. The agency now allows professional traders to invest in foreign crypto exchange-traded funds (ETFs).
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