SS #54 - Taiwan Targets 2026 Launch for Regulated Stablecoin

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The focus this week sharpens on Asia, where two major economies are accelerating their timelines for regulating stablecoins, albeit with very different points of contention: Taiwan is moving toward a late 2026 launch for its first regulated stablecoin following the likely passage of the Virtual Assets Service Act, yet remains stalled on the critical decision of whether to peg the token to the US Dollar (USD) for global utility or the New Taiwan Dollar (TWD) to maintain strict currency controls; concurrently, South Korea's ruling Democratic Party is pressing the government for a much faster pace, demanding the submission of its stablecoin bill by December 10th with the goal of passing the legislation into law as early as January.

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In Today's Edition:

• Headline: Taiwan Targets 2026 Launch for Regulated Stablecoin

• Quick Bites: South Korea’s Ruling Party Issues Ultimatum on Stalled Stablecoin Bill

• Yield of the Week: 12.71% APY on Euler

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HEADLINE

Taiwan Targets 2026 Launch for Regulated Stablecoin

State of play: Taiwan is targeting a late 2026 launch for its first regulated stablecoin, following the likely passage of the draft Virtual Assets Service Act, but the core regulatory decision of its fiat peg remains unresolved.

• The draft Virtual Assets Service Act has cleared initial cabinet reviews, signaling a clear path to becoming law, with stablecoin-specific rules to follow within six months.

• Initially, only licensed financial institutions (banks) will be permitted to issue the stablecoin, a measure intended for risk management and strong regulatory oversight.

• Regulators are undecided on pegging the stablecoin to the US Dollar (USD) or the New Taiwan Dollar (TWD), a choice that will determine the token's impact on cross-border transactions and Taiwan’s strict currency controls.

What’s Next: The FSC and Central Bank will face an intense regulatory choice between a USD-peg, which offers easy global utility, and a TWD-peg, which better preserves monetary control, while local financial institutions begin preparing their issuance infrastructure for a late 2026 launch.

Why it Matters: This decision is critical because it will either propel Taiwan toward becoming a major regulated financial technology hub or serve as a significant stress test for the island's decades-old currency control framework.

Our Take: While the market favors a USD-pegged stablecoin for maximum utility, the Central Bank's history of strict currency control suggests they will initially opt for a TWD-pegged stablecoin, focusing on domestic payments while crypto participants should monitor the final peg decision as the ultimate determinant of global integration potential.

QUICK BITES

• Aave DAO mulls pulling back 'multichain strategy'.

• Stable unveils tokenomics, mainnet launching next week.

• HSBC says S&P’s Tether downgrade revives ‘de-pegging’ risk warning.

• South Korea's ruling party issues ultimatum on stalled stablecoin bill.

• Canada eyes stablecoin rules as Scotiabank flags limited market impact.

• US FDIC to propose GENIUS Act implementation framework this month.

• Sony’s blockchain partner Startale launches dollar stablecoin on Soneium.

• Unlimit debuts stable.Com, a decentralized clearing house built for stablecoins.

• Stable, Theo anchor $100M+ in Libeara-backed tokenized treasury fund ‘ULTRA’.

• BNP Paribas joins EU bank stablecoin venture helmed by Ex-Coinbase Germany Exec.

YIELD OF THE WEEK

Euler Earn USDT: 12.71% APY

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Contango USDC/USDT on Euler: 12.74%-82.39%

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Contango sUSDe/msUSD on Morpho: 4.91%-43.11%

• Contango facilitates leveraged exposure, up to 11.46x, to the sUSDe/msUSD pair on the Morpho platform using deposits of various underlying assets.

• Users depositing funds through Contango are eligible to receive associated Contango and Ethena points.

• Utilization of Contango's service incurs charges for both flashloan usage and a general service fee.

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