stablecoin

The second session of the seminar was led by Professor Yueh-Ping Yang , Deputy Director of CIEL, with Professor Ying-Hsin Tsai as discussant. The session focuses on “Tokenization of Payment Instruments”. The seminar provided an in-depth analysis of the institutional framework, risks and future regulatory directions of payment tokenization from comparative perspectives.

Operation Models and Risks of Stablecoins
Professor Yang noted that stablecoins share many characteristics with tokenized forms of e-money. Using the distinction between primary and secondary markets, he explained the legal structure of stablecoins: while subscription and redemption in stablecoin’s primary market resemble e-money, stablecoin’s secondary-market circulation is beyond the offeror’s control and more depends on virtual asset service providers. As a result, stablecoin faces new risks in addition to that of e-money in areas such as AML compliance, ledger governance, and price de-pegging.

Global Regulatory Trends: Comparative Observations
Professor Yang further outlined global developments in stablecoin regulation. Jurisdictions such as Japan and Singapore regulate stablecoins under their payment laws, while the EU treats stablecoins as a form of e-money token. The United States, lacking a federal-level payment law, sometimes tend to conceptualize stablecoins as deposit-like products.

Japan’s Regulatory Design and Industry Strategy
Professor Tsai added that Japan pioneered a dedicated legal framework for stablecoins in 2022, placing it at the global forefront. Using JPYC’s yen-denominated stablecoin as an example, she explained that its reserve assets primarily consist of government bonds and cash. She also highlighted how Japanese banks are actively building tokenization infrastructure through the Progmat platform. Nonetheless, tokenization also introduces challenges for banks, including reduced fee income, more complex liquidity management, and diminished control over data.

Regulatory Directions in the Tokenization Era
Professor Tsai emphasized that regardless of stablecoins, deposit tokens, or CBDCs, the core of future payment instruments will remain in the hands of financial institutions and central banks. Payment tokenization compels regulatory frameworks to rethink functionality, risks, and responsibility allocation. As the system continues to evolve, cross-disciplinary collaboration and forward-looking planning will be crucial for Taiwan as it navigates global fintech transformation.

Amid the rapid evolution of global fintech, key questions persist: how can regulatory frameworks balance innovation and stability, and how should they address cross-border supervision challenges brought by new forms of payment instruments? CIEL will continue advancing research in these areas, striving to help shape a forward-looking and resilient legal framework for Taiwan.

On November 13, 2025, CIEL Deputy Director Professor Yueh-Ping (Alex) Yang was invited to attend the “International Forum on Virtual Asset Crimes Investigation and Cross-Border Cooperation,” hosted by the Anti-Money Laundering Office, Executive Yuan. The forum brought together expert representatives from domestic and international government agencies to engage in in-depth discussions on topics including tracking illicit virtual asset flows, combating online fraud, and strengthening cross-border cooperation.

Deputy Director Yang served as a panelist in the session titled “Stablecoins and Chinese Web: Money Laundering and Clearing Services between Digital Asset and FIAT.” The session featured keynote presentations by Mathieu H. L. and Simon Roch from FIU France. From legal and regulatory perspectives, Deputy Director Yang highlighted the following key points:

• Traditional financial crime investigations have focused on monitoring money flows; however, in the era of digital finance, the boundary between money flows and data flows is increasingly blurred, calling for a rethinking of crime prevention strategies.
• In virtual asset–related crimes, the key points for investigation may be shifting from unregulated OTCs to unregulated decentralized finance (DeFi).
• Within DeFi ecosystems, SNS platforms, such as Telegram or Wechat, play a critical role in facilitating communication and coordination. Future criminal investigations should therefore extend beyond regulating financial intermediaries (e.g., VASPs) to also consider the role of digital platform service providers.

CIEL will continue to engage in international exchanges and work alongside government authorities and law enforcement agencies to advance the development of financial regulation and crime prevention frameworks for virtual assets.

In September 11, 2025, at the “IADI Core Principles International Conference” held in Taiwan by the International Association of Deposit Insurers (IADI).CIEL Deputy Director Professor Yueh-Ping (Alex) Yang was invited to serve as a panelist, sharing on the topic of “The Impact of Digital Financial Innovation on the Deposit Insurance System.”

This session focused on whether emerging financial instruments such as electronic payments, stablecoins, and deposit tokens should be covered by deposit insurance. From an academic perspective, Deputy Director Yang proposed three key criteria for the assessment: liquidity risk, contagion risk, and the money creation function, which sparked enthusiastic responses and in-depth discussions among representatives from various countries.

IADI is an international standard-setting body for deposit insurance systems, and Taiwan’s Central Deposit Insurance Corporation is IADI’s formal member. This year’s conference, held in Taiwan, comes at a significant moment for the revision of IADI’s Core Principles since 2014, and coincides with the 40th anniversary of the Central Deposit Insurance Corporation, giving it profound significance.

On May 26, 2025, the College of Law at National Taiwan University hosted a special lecture featuring Professor Shinsaku Iwahara, a leading authority on Japanese banking law, who spoke on “The Current Status and Challenges of Japanese Banking Regulation.”

Professor Iwahara’s lecture addressed a wide range of financial regulatory issues, including the separation of banking and commerce, foreign exchange business supervision, stablecoins, and central bank digital currencies (CBDCs). Deputy Director Professor Yueh-Ping Yang of CIEL was invited as the discussant, engaging in a cross-national dialogue with Professor Iwahara.

The two professors conducted an in-depth discussion on the similarities, differences, and distinctive features of regulatory frameworks in Japan, the United States, and Taiwan. Deputy Director Yang particularly raised questions regarding Taiwan’s ongoing regulatory developments in electronic payments, stablecoins, and digital currencies, inviting Professor Iwahara to share Japanese perspectives and experiences in these areas.