**I. The Rise of Stablecoins: A “Stable Force” in Financial Markets**
In recent years, one of the most notable emerging assets in the global financial market is undoubtedly “stablecoins.” Stablecoins refer to digital tokens that are pegged to specific assets, such as fiat currencies, gold, or other commodities, which help maintain their price stability.
Due to their significantly lower volatility compared to mainstream cryptocurrencies like Bitcoin and Ethereum, stablecoins have not only become a critical bridge linking traditional finance with the digital asset market but have also begun to demonstrate immense potential in areas such as cross-border payments, international remittances, and financial inclusion.
According to statistics, the total issuance of stablecoins globally has surpassed $170 billion, with approximately 90% pegged to the US dollar, indicating the absolute dominance of the dollar in international financial settlements. However, there is also potential demand for other major fiat currencies, such as the euro, British pound, and Japanese yen, which are gradually emerging amid regulatory and fintech trends in various countries. For export-oriented economies like Taiwan, how to leverage stablecoins to enhance the efficiency of cross-border capital flows and promote financial inclusion has become an urgent issue.
**II. Global Regulatory Trends: Leading Examples from Singapore and Hong Kong**
Despite the promising outlook for the stablecoin market, a lack of appropriate regulation could lead to risks such as financial money laundering, illegal capital outflows, and insufficient reserves.
To reduce uncertainty, governments and central banks worldwide have begun to establish regulatory frameworks. For instance, the Hong Kong Monetary Authority (HKMA) is piloting the application of a Hong Kong dollar stablecoin in cross-border payments, while the Monetary Authority of Singapore (MAS) has gone further by launching a stablecoin regulatory framework (SCS) in 2023, allowing the issuance of stablecoins pegged to G10 currencies and emphasizing reserve management and information transparency.
Singapore’s approach has several distinctive features: first, it clearly outlines the issuance conditions and regulatory requirements, including reserve ratios and auditing mechanisms; second, it permits qualified operators to issue single-currency-pegged stablecoins, allowing the market to determine the types of currencies issued based on demand; third, an open and flexible attitude has attracted international issuers (such as Circle and Paxos) to establish a presence, rapidly fostering the emergence of Singapore’s stablecoin ecosystem. These successful experiences undoubtedly provide Taiwan with a viable development path.
**III. Advantages for Taiwan in Developing Stablecoins: Foreign Exchange Reserves and Technological Strength**
If Taiwan aims to promote stablecoin business, it possesses the following advantages:
1. **Strong Foreign Exchange Reserves**
Taiwan’s foreign exchange reserves exceed $540 billion, ranking among the top globally. This robust economic support not only enhances market confidence but also provides sufficient backing for the legal reserves of stablecoins. Once the government or financial institutions adopt a scaled reserve mechanism, it will help maintain the stability of stablecoin prices and liquidity.
2. **Well-Established Financial System and High Penetration of Electronic Payments**
Taiwan has a sound banking and securities market, with the penetration rate of electronic payments continuously increasing, and the public’s acceptance of fintech is generally rising. These conditions facilitate the application of stablecoins in payment, remittance, and settlement scenarios, enhancing market recognition of digital assets.
3. **Strength in Information Communication and Artificial Intelligence (AI)**
Taiwan possesses international competitiveness in the semiconductor and ICT industries, with a favorable R&D environment. If it can integrate blockchain and AI technologies to create safer and more efficient stablecoin trading or regulatory platforms, it will further solidify Taiwan’s position in fintech in the Asia-Pacific region.
**IV. Practical Benefits of Stablecoins for Taiwan: Cross-Border Payments and Financial Inclusion**
1. **Cross-Border Trade and International Settlement**
Taiwan is a well-known trade-oriented economy, highly reliant on exports of electronic products and precision machinery, accompanied by significant cross-border capital flow demands. If exporters or small and medium-sized enterprises can adopt compliant US dollar or euro stablecoins to accelerate payment and collection processes, it would not only reduce risks arising from exchange rate fluctuations but also lower transaction costs and shorten settlement times through blockchain technology.
2. **Remittance Needs of Rural Areas and Foreign Workers**
The number of foreign workers in Taiwan is considerable, and financial services in rural areas are lacking. If a low-threshold, high-convenience stablecoin payment system can replace traditional remittance channels, it will significantly reduce fees and processing times, promoting the practical realization of financial inclusion in Taiwan. This will improve the unequal economic circumstances faced by foreign workers and disadvantaged groups, further promoting social integration.
**V. Learning from Singapore’s Experience: Three Strategies Taiwan Can Adopt**
1. **Strategy 1: Open G10 Currency Stablecoin Issuance**
Referring to the framework of the Monetary Authority of Singapore (MAS), allow qualified institutions to issue stablecoins pegged to mainstream currencies such as the US dollar and euro. By opening up diverse currency options, this not only meets international market demands but also helps Taiwan’s financial firms expand overseas.
2. **Strategy 2: Attract International Stablecoin Enterprises and Capital**
Taking a cue from Singapore’s methods to attract international issuers like Circle and Paxos, Taiwan could create a favorable investment environment and policy incentives by adjusting tax burdens, relaxing foreign investment entry thresholds, and simplifying administrative processes. This would encourage global fintech companies to establish themselves in Taiwan, rapidly enhancing market vitality and competitiveness.
3. **Strategy 3: Establish a Dedicated Regulatory Framework and Licensing System**
Effective regulation is key to protecting investors and maintaining financial stability. The government should quickly establish a stablecoin licensing system, clearly defining the reserve ratios, internal control mechanisms, capital adequacy ratios, and information disclosure obligations of issuing institutions. Regular audits and public reporting will further ensure market trust in stablecoins and prevent potential systemic risks.
**VI. Future Outlook: Establishing Taiwan’s Leadership in Digital Finance in the Asia-Pacific**
With strong foreign exchange reserves, advanced ICT technology, and deep participation in international financial markets, Taiwan has the potential to become a regional stablecoin hub.
If it successfully learns from Singapore’s experience, swiftly establishes an open and comprehensive regulatory environment, and combines the strengths of local financial institutions with international capital, Taiwan could accelerate the digitization of cross-border payments and secure a place in the blockchain and decentralized finance (DeFi) ecosystem.
More importantly, the development of stablecoins and digital finance is not only about serving large enterprises and financial institutions but can also effectively address the remittance challenges faced by rural residents and foreign workers, fostering financial inclusion and social support. This signifies that Taiwan can balance “financial innovation” and “inclusive values,” thereby achieving higher levels of international competitiveness and social influence.
**VII. Conclusion: Using Stablecoins as a Starting Point to Create a New Era of Digital Finance in Taiwan**
The trend of stablecoins has become a focal point in the global financial market, and how to properly regulate and utilize them tests the thinking and action of governments and financial institutions. If Taiwan can seize this trend, learn from Singapore’s regulatory practices regarding G10 currency stablecoins, and implement them appropriately within the local financial ecosystem, it will undoubtedly provide a more efficient and inclusive digital financial experience for the industry, academia, and the general public.
Currently, stablecoins are rapidly reshaping the landscape of the global financial market, and they are merely the starting point on the journey to a digital economy. Although Taiwan possesses a solid foundation and advantages in fintech, to stand out in this competitive wave, it must accelerate its pace, learn from successful international cases, and formulate a dedicated regulatory framework suited to local conditions.
By opening G10 currency-pegged stablecoin issuance, providing convenient payment tools and capital turnover methods for businesses and the public, attracting international enterprises, establishing a robust regulatory and licensing system, and enhancing inter-agency and international cooperation, Taiwan will have the opportunity to create an innovative and secure stablecoin ecosystem, striving for greater digital financial influence in the Asia-Pacific and even globally.
In the future, as the application of diverse blockchain technologies and the popularity of smart contracts continue to evolve, areas such as cross-border finance, decentralized finance, and digital asset trading will keep progressing. If Taiwan can seize this opportunity, using stablecoins as an entry point and effectively leveraging local and international resources and cooperation, it will be able to establish a firm foothold in the next phase of the global financial competition, creating greater value for individuals, businesses, and the financial market while smoothly transitioning into a new era of digital finance.
**Author: Guo Maoren, Director of the Blockchain Enthusiasts Association**
Opinion articles present diverse views and do not represent the stance of WEB3+.