Banking Bureau Director Tong Zhengzhang Details the Stablecoin Regulatory Blueprint of the Virtual Asset Service Act: Stability is Essential, but It Must Also 'Truly Be Implemented'

Yesterday (8th), the "2026 Taiwan Venture Capital and Private Equity Investment Annual Conference" was jointly hosted by the Taiwan Venture Capital Association (TVCA) and the Taiwan Private Equity Association. During the "Stablecoin Summit" session, Bank Bureau Director-General Tong Chengzhang of the Financial Supervisory Commission (FSC) was invited to give a keynote speech titled "Taiwan's Regulations and Supervision on Stablecoin Issuance."

(Previous report: BitoEX launches enterprise-level stablecoin settlement service "Bito.ONE," recruiting ten enterprises for the first trial) (Background supplement: Full interpretation of Taiwan's cryptocurrency special law "Virtual Asset Service Law": significance for investors? Exchanges move to licensing system, stablecoin issuer conditions finalized)

Table of Contents

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• Tong Chengzhang humorously unveils the "Stablecoin Regulatory Blueprint"
• Supervision no longer fragmented: Intervention is not about braking, but about driving more stably
• Safety and development go hand in hand: Terra evaporated $60 billion overnight, "Where is its stability?"
• Drawing on six major jurisdictions: From Japan's "Payment Services Act" to the U.S. GENIUS Act
• Behind regulation are two words: Trust
• Stablecoin specific chapter: Domestic issuance adopts a licensing system, every transaction is reviewed
• USDT and USDC can also come to Taiwan, but must apply for approval
• Conclusion: The hand of self-discipline first, the hand of external discipline fills in

Just recently, on June 30, the Legislative Yuan passed the third reading of the "Virtual Asset Service Law," clarifying the basis for stablecoin issuance. In just ten minutes, FSC Bank Bureau Director-General Tong Chengzhang fully outlined Taiwan's legislative thinking on stablecoin regulation, international references, and the subsequent timeline for subsidiary laws. The Block witnessed the most direct firsthand explanation from the competent authority to the industry after the special law passed.

Tong Chengzhang humorously unveils the "Stablecoin Regulatory Blueprint"

Director Tong began with self-deprecation, saying the organizer told him he would face two challenges today:

First, he had to "change costume" in a very short time. "They said if you dress too formally, you'll definitely clash with the guests. Obviously, I failed to change costume because the Finance Committee meeting just ended and I rushed over, so I didn't have time to change."

Second, the bigger challenge: "He said Director, if you talk about laws, regulations, and policies in the afternoon, I guarantee everyone in the audience will fall asleep."

Director Tong laughed, saying he was willing to accept the challenge "because I know I only have ten minutes. If I can still make people fall asleep in ten minutes, I've decided to have a side hustle and change careers. Society is under a lot of pressure lately, and everyone has sleep problems."

Behind the joke lies a critical moment: On the night of June 30, when the "Virtual Asset Service Law" was formally passed, there were two different scenes. One was Web3 friends celebrating happily; the other was at the FSC, where colleagues were burning the midnight oil to ensure that the relevant authorized subsidiary laws could be launched no later than September this year, providing everyone with a guideline.

Supervision no longer fragmented: Intervention is not about braking, but about driving more stably

Director Tong humbly stated that the development of the Web3 ecosystem is not for him to teach, but there is a very important trend: "Supervision is no longer fragmented. It no longer intervenes only when something happens. Usually, everyone thinks it's best if the FSC doesn't bother them. But as soon as something happens in the market—whether it's money laundering, consumer protection, etc.—everyone gathers online: Where is the FSC?"

He said that in the process of introducing new technologies, countries around the world hope for a strong regulatory agency to intervene, "but this intervention is not about preventing fraud, holding back industry players, or hitting the brakes. It is about hoping that this car can drive more steadily."

Safety and development go hand in hand: Terra evaporated $60 billion overnight, "Where is its stability?"

Director Tong stated, "Safety and development must go hand in hand" is the core concept of past FSC financial policies, and stablecoins are no exception. On the safety front, two aspects require special management: first, whether the assets are sufficient, and whether stablecoins are truly stable.

Director Tong cited Terra as an example: "Terra had a problem, and $60 billion vanished overnight. You call it a stablecoin? So where is its 'stability'? Therefore, the 'stability' of stablecoins is crucial, and relevant information must be fully disclosed to holders." Second, it involves issues of misappropriation and public interest. Stablecoins represent quasi-currency, and capital flows involve money laundering prevention, consumer protection, and cybersecurity.

On the development side, we must ask about the use cases of stablecoins: "Are they limited to what we currently imagine—payments, international trade, etc.—or are there greater possibilities?" He echoed the "golden cross" mentioned by a previous speaker: "A key point of this golden cross is that the intersection must allow regulators and industry players to find common ground. With common ground, this car can drive forward both safely and steadily."

Drawing on six major jurisdictions: From Japan's "Payment Services Act" to the U.S. GENIUS Act

After explaining "safety and development go hand in hand," Director Tong noted that Taiwan's stablecoin legal framework references practices from six major countries or regions: Japan, the EU, Singapore, the UK, Hong Kong, and the U.S.

Some embed relevant provisions into existing laws, while others enact special legislation. Japan, due to the 2014 Mt. Gox incident and the Coincheck hack, was the fastest to legalize stablecoins, defining them as electronic payment instruments, requiring them to be pegged to a single fiat currency, and codifying regulations under the "Payment Services Act." Following that, the EU's MiCA, Singapore, the UK, Hong Kong, and the U.S. each developed their own characteristics.

Regarding Taiwan's regulations, he concluded: "For example, in the U.S., each state government has its own regulatory direction. Federal agencies, the Fed, and the OCC each have opinions, and finally, the GENIUS Act was consolidated. Each country has different development backgrounds, and Taiwan is no different."

Behind regulation are two words: Trust

Director Tong also shared something with the venture capital and crypto community present: "In the past, if you were developing coins or emerging technologies in the corner of geeks, playing with your own toys, it was fine—no one would bother you. But if today it involves a very large public interest, whether entering the payment system or participating in economic and social activities, this part must have regulation for you to move steadily."

He pointed out that the FSC manages banking, securities, and insurance. The highest basis is Article 149 of the Constitution, which explicitly states that financial institutions must be regulated by the state. "Why? Because behind it lies two very important words: 'trust.' If you want to step out and combine with public interest, you must have trust as support."

Extracting the common regulatory focus of the six jurisdictions is precisely the five elements for building trust in the payment system, which are the top priorities for Taiwan's regulation from virtual assets to stablecoins:

• First, full asset backing: "Since it's called stable, what are the supporting assets? Let everyone know."
• Second, asset segregation: "Many cases in the past, like FTX, where client money went into company coffers, and company money went into the hands of the responsible person. How can such a business model survive?"
• Third, ensure issuance and redemption at par, and issuers must have adequate capital: "As the last line of defense to absorb risks throughout the operation."
• Fourth, payment neutrality: Stablecoins playing a payment role cannot pay interest. "If you pay interest, it involves a very important banking behavior called deposit-taking, which would disrupt the entire financial system."
• Fifth, clear disclosure: All actions, accounts, fund flows, and coin flows must be clearly disclosed.

Stablecoin specific chapter: Domestic issuance adopts a licensing system, every transaction is reviewed

Director Tong explained that the stablecoin chapter of the "Virtual Asset Service Law" first defines stablecoins, emphasizing that they must be linked to fiat currency to serve as payment instruments. "Currency plays a very important role in the functioning of the economy and society. For stablecoins to be used for payments and play a role in international trade, they must have an absolute link to fiat currency."

Domestic issuance of stablecoins adopts a "licensing system." "Every stablecoin issued in Taiwan must be reviewed and approved by the regulatory authority." The authorized subsidiary laws will specify the qualifications and capital requirements for issuers. "These are all efforts to resist risks, letting holders know that the stablecoins you issue are highly regulated."

In terms of regulatory requirements, there are six key points:

1. Full asset backing with independent custody; the central bank also has reserve requirements for issuers to ensure stable operations.
2. Standards for issuance at par and redemption are pre-established in the law.
3. Protection of holder rights. Director Tong revealed that during public hearings and the legislative process, some opinions suggested that when an issuer goes bankrupt, tax debts and employee salaries should also be protected. "We communicated with the participants: Sorry, holder rights protection is the most important. Taxes to be paid and wages to be paid are the issuer's matters, and those creditors should claim from the issuer. For holder rights protection, we ring-fence it—others cannot touch it."
4. Establish appropriate internal control and internal audit systems, completing inventory and regulatory assessment of operational risks such as cybersecurity and labor rights. "The banking and financial industries have already established strict three lines of defense. In the future, we will share with industry players through the Banking Association platform how to establish appropriate systems."
5. Transaction data confidentiality—this is very important.
6. Information disclosure and reporting. "Now it's not about whether you report, but about how 'timely' you report." Any material information must be immediately and fully communicated to all market stakeholders.

USDT and USDC can also come to Taiwan, but must apply for approval

Regarding the market's most concerned issue of dual-track domestic and foreign stablecoins, Director Tong stated that domestic stablecoins in principle adopt a licensing system, reviewed by the competent authority. As for foreign stablecoins like USDT and USDC, which already have high global acceptance and circulation, "they can also come to Taiwan," but relevant service providers must apply to the competent authority for approval before offering trading or other related services for such foreign stablecoins on their platforms. During the review process, it will be ensured that foreign stablecoins have equivalent protection mechanisms, and it will also examine whether the issuing country has established legal frameworks.

"Just as when financial institutions set up overseas branches, we ask them to assess whether the local country's laws and regulations are consistent with Taiwan's; when foreign financial institutions set up in Taiwan, they also assess whether Taiwan's cybersecurity and personal data protection laws align with their home countries. The alignment of international standards is very important."

Conclusion: The hand of self-discipline first, the hand of external discipline fills in

At the end of the speech, Director Tong offered two concluding points.

First, continue to align with international standards. Whether in practice, regulations, or systems, we must continuously connect with advanced countries. "This will minimize the overall compliance costs for industry players."

Second, maintain a prudent attitude and emphasize the importance of "language interoperability" between regulators and industry players. In the past, the audience for financial regulation was financial institutions, and both sides understood each other's language. In the virtual asset field, "industry associations play a very important role."

Regarding financial institutions participating in virtual asset-related businesses, Tong stated that the FSC holds a positive attitude. "After all, financial institutions operating under our regulatory framework have already done very well in compliance, risk management, and consumer protection." Currently, "5+1" banks have engaged in virtual asset custody services, and the FSC has asked the Banking Association to formulate relevant self-regulatory rules.

"Financial regulation has two hands: one is the hand of self-discipline, and the other is the hand of external discipline. In the process of innovation, we will first encourage self-discipline to take the lead. If there are deficiencies, external discipline will step in to jointly achieve financial stability and financial development." Tong Chengzhang concluded with these words.