[Perspective] Taiwan Should Learn from Singapore’s Experience to Promote the Development of G10 Currency-Pegged Stablecoins

**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 markets is undoubtedly “stablecoins.” Stablecoins are digital tokens that are pegged to specific assets, such as fiat currencies, gold, or other commodities, which helps maintain their price stability.

Due to their much lower volatility compared to mainstream cryptocurrencies like Bitcoin and Ethereum, stablecoins have become a key bridge connecting traditional finance and the digital asset market. They are also gradually showcasing immense potential in areas such as cross-border payments, international remittances, and financial inclusion.

According to statistics, the total issuance of stablecoins worldwide has exceeded 170 billion USD, with approximately 90% pegged to the US dollar, highlighting 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, Japanese Yen, etc.), which is gradually emerging amid regulatory and fintech trends worldwide. 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**

Although the outlook for the stablecoin market is promising, a lack of appropriate regulation could pose risks such as financial money laundering, illegal capital outflows, and insufficient reserves.

To reduce uncertainty, governments and central banks around the world have begun to formulate regulatory frameworks. For instance, the Hong Kong Monetary Authority (HKMA) is piloting the use of a Hong Kong dollar stablecoin for cross-border payments, while the Monetary Authority of Singapore (MAS) has gone a step further by launching a Stablecoin Regulatory Framework (SCS) in 2023, allowing for the issuance of stablecoins pegged to G10 currencies and emphasizing reserve management and information transparency.

Singapore’s approach has several key features: First, it clearly lists the issuance conditions and regulatory requirements, including reserve ratios and audit mechanisms; second, it permits qualified entities to issue single-currency pegged stablecoins, allowing the market to decide on the types of currencies based on demand; third, its open and flexible attitude has attracted international issuers (such as Circle and Paxos) to establish their presence, quickly driving the rise of Singapore’s stablecoin ecosystem. These successful experiences undoubtedly provide Taiwan with a viable development path.

**III. Advantages of Developing Stablecoins in Taiwan: Foreign Exchange Reserves and Technological Strength**

If Taiwan aims to promote stablecoin business, it has the following advantages to leverage:

– **Strong Foreign Exchange Reserves**
Taiwan’s foreign exchange reserves exceed 540 billion USD, ranking among the top in the world. 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 scalable reserve mechanism, it will help maintain the stability and liquidity of stablecoin prices.

– **Comprehensive Financial System and High Penetration of Electronic Payments**
Taiwan boasts a sound banking and securities market, with increasing penetration of electronic payments and a generally high acceptance of fintech among the public. These conditions facilitate the application of stablecoins in payment, remittance, and settlement scenarios, thereby enhancing market recognition of digital assets.

– **Strength in Information Communication and Artificial Intelligence (AI)**
Taiwan possesses international competitiveness in the semiconductor and ICT industries, along with a favorable R&D environment. If it can combine blockchain and AI technologies to create safer and more efficient stablecoin trading or regulatory platforms, it will further consolidate Taiwan’s fintech position in the Asia-Pacific region.

**IV. Practical Benefits of Stablecoins for Taiwan: Cross-Border Payments and Inclusive Finance**

– **Cross-Border Trade and International Settlements**
Taiwan is a well-known trade-oriented economy with a high dependence on exports of electronic products and precision machinery, accompanied by significant cross-border capital flow demands. If exporters or SMEs can adopt compliant USD or Euro stablecoins to accelerate payment and collection processes, it will not only reduce risks arising from exchange rate fluctuations but also lower transaction costs and shorten settlement times through blockchain technology.

– **Remittance Needs of Rural Areas and Foreign Workers**
There is a considerable number of foreign workers within Taiwan, and financial services in rural areas are lacking. If a stablecoin payment system with low barriers and high convenience can replace traditional remittance channels, it will significantly reduce fees and processing times, promoting practical financial inclusion in Taiwan. This would improve the economic situation of foreign workers and disadvantaged groups, further facilitating social integration.

**V. Learning from Singapore’s Experience: Three Strategies Taiwan Can Adopt**

– **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 offering diversified currency options, not only can it meet international market demand, but it can also help Taiwanese financial institutions expand their overseas business.

– **Strategy 2: Attract International Stablecoin Enterprises and Capital**
Taking a cue from Singapore’s approach to attracting international issuers such as Circle and Paxos, Taiwan can create a favorable investment environment and policy incentives through adjusting tax burdens, easing foreign investment access, and simplifying administrative processes. This will encourage global fintech companies to establish operations in Taiwan, rapidly enhancing its market vitality and competitiveness.

– **Strategy 3: Establish a Dedicated Regulatory Framework and Licensing System**
Effective regulation is key to protecting investors and maintaining financial stability. The government should promptly establish a stablecoin licensing system that clearly specifies the reserve ratios, internal control mechanisms, capital adequacy ratios, and information disclosure obligations of issuing entities. Regular audits and public reports will further ensure market trust in stablecoins and prevent potential systemic risks.

**VI. Future Outlook: Establishing Taiwan’s Position as a Digital Finance Leader in the Asia-Pacific Region**

With its strong foreign exchange reserves, advanced ICT technology, and deep involvement in international financial markets, Taiwan has the potential to become a regional stablecoin hub.

If Taiwan can successfully learn from Singapore’s experience to swiftly establish an open and comprehensive regulatory environment while combining the strengths of local financial institutions and international capital, it will have the opportunity to accelerate the digitalization 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 does not only serve large enterprises and financial institutions; it can also effectively address the remittance challenges faced by people in rural areas and foreign workers, promoting financial inclusion and social mutual assistance. This signifies that Taiwan can simultaneously balance “financial innovation” and “inclusive value,” thereby achieving a higher level of international competitiveness and social impact.

**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 worldwide. If Taiwan can seize this trend by referencing Singapore’s regulatory practices on G10 currency stablecoins and adapt them to its local financial ecosystem, it will undoubtedly bring a more efficient and inclusive digital financial experience to the industrial, governmental, academic sectors, and the public.

Currently, stablecoins are rapidly reshaping the landscape of the global financial market, and they represent just the starting point toward a digital economic world. Although Taiwan possesses a solid foundation and advantages in fintech, it must accelerate its pace, learn from successful international cases, and formulate a dedicated regulatory framework tailored to local conditions to stand out in this wave of competition.

By opening the issuance of G10 currency pegged stablecoins, providing convenient payment tools and capital turnover methods for enterprises and the public, attracting international companies, establishing a robust regulatory and licensing system, and strengthening cross-institutional and cross-border cooperation, Taiwan will have the opportunity to create a stablecoin ecological environment that combines innovation and security, striving for greater digital financial influence both in the Asia-Pacific region and globally.

In the future, as more diverse blockchain technology applications and smart contracts become prevalent, fields such as cross-border finance, decentralized finance, and digital asset trading will continue to evolve. If Taiwan can seize this opportunity, using stablecoins as an entry point and effectively leveraging local and international resources and collaborations, it will surely establish a foothold in the next phase of global financial competition, creating greater value for individuals, enterprises, and the financial market, and smoothly transitioning into a new era of digital finance.

**Author: Guo Maoren, Director of the Blockchain Enthusiasts Association**

*The opinions presented in this article represent diverse views and do not necessarily reflect the position of WEB3+.*