Taiwan Central Bank Warns of Stablecoin Oversight Risks and Fraud

Taiwan central bank governor Yang Chin-long said stablecoins may have payment potential but pose stablecoin oversight risks and fall short of Bank for International Settlements standards needed to anchor a monetary system.

Speaking in Taipei at a Financial Information Service Co conference, Yang said stablecoins lack unity, elasticity and integrity, and tokens can trade at premiums or discounts depending on reserve quality and issuer risk.

He said many stablecoin issuers are registered in lightly regulated jurisdictions, drawing comparisons to the US wildcat banking era.

Yang noted that supply is difficult to adjust because new coins are issued only after fiat deposits, while cross-border use complicates user identification and tracking, raising fraud risks.

He questioned whether there is sufficient demand for a Taiwan dollar stablecoin and said settlement in a tokenised system would still require a central bank digital currency.