In Lagos, Nigeria, Aisha imports electronics from East Asia. The naira’s volatility drained her margins — until she switched to US dollar-pegged stablecoins such as USDC and USDT. What took days now settles in minutes, shielding her from currency swings and bank fees. With inflation at about 30 percent last year, stories like hers abound: stablecoins power remittances, trade and savings — US dollars without borders for small businesses that cannot wait on correspondent banks.
For a developed nation such as Taiwan, the contrast seems stark, but that is exactly why the lesson matters. The same technology is poised to transform our trade. In the next couple of years, stablecoins — digital tokens pegged to traditional currencies — will sit alongside SWIFT (the bank messaging network) and letters of credit in cross-border commerce. With round-the-clock US dollar settlement now live on major networks, ignoring that becomes a commercial disadvantage.
Exporters and importers can use stablecoins to cut settlement from days to minutes, unlock working capital, and reduce costs and the risk of fraud. The strategic question is not whether to use stablecoins, but whether Taiwan should mint a New Taiwan dollar-pegged stablecoin.
The answer is likely no — for two clear reasons: it would not be profitable and stablecoins are, at their core, the Eurodollar system rebuilt in software.
Circle — the issue of USDC and the world’s second-largest stablecoin platform listed on the New York Stock Exchange — earns nearly all of its revenue from interest on US Treasury-backed reserves. This is the standard model for US dollar-denominated stablecoins and it works because US short-term yields are well above most developed markets. Taiwan’s 10-year government bonds pay about 1 to 1.5 percent, versus about 4 to 4.5 percent for US Treasuries. The same yield gap that pushes our life insurers to invest overseas (and creates asset-liability mismatch strains) would make a NT dollar stablecoin structurally uncompetitive.
Taiwan could launch one — and it might learn from the process — but global holders would have little reason to use it and issuers would struggle to cover costs or build liquidity. It is not impossible — just misaligned with the current yield structure and market depth.
Stablecoins do not behave like national currencies; they function as networks. Specifically, they are a digital recreation of the Eurodollar system — the vast, decades-old network of US dollars held in banks outside the US, several times larger than the domestic system established by the US Federal Reserve. This offshore system grows whenever a non-US resident holds and transacts in US dollars, and stablecoins are the logical evolution of this system — the same monetary lifeblood moving through a faster, more efficient digital vein denominated in US dollars.
This network logic is why Taiwan Semiconductor Manufacturing Co cannot receive NT dollars for its chips and why Japan pays for Indonesian coal in US dollars. Currency choice in global trade follows liquidity and utility, not national flags. Far from dethroning the US dollar, stablecoins are a powerful extension of it — faster, safer, cheaper and borderless.
Once stablecoins are understood as Eurodollars 2.0, the real stakes become clear: The question is not what they are, but who writes their rules. We have seen this before. For decades, the key interest rate for the offshore US dollar system was LIBOR, a benchmark set by bankers in London. Since 2023, Washington replaced it with SOFR, a rate anchored to US Treasury markets, effectively seizing control of offshore US dollar pricing power. The push to regulate stablecoins is the same strategic move for the digital age.
Legislation like the Guiding and Establishing National Innovation for US Stablecoins Act aims to standardize reserves, custody and disclosure, pulling the system firmly inside the US sphere of influence. This is not a neutral technology upgrade; it is industrial policy for the US dollar. While geoeconomic rivals such as Hong Kong have positioned themselves to capture this vast market since at least 2022, Washington’s goal is to ensure it reclaims the authority to write — and enforce — the rulebook for the Eurodollar.
The strategic rational for stablecoins does not stop there. Trade surplus countries have long been the primary buyers of US Treasuries. If the US succeeds in rebalancing trade and shrinking the surpluses of these traditional US Treasury buyers, new sources of demand for US debt would be needed. Settling trade in stablecoins that channel reserves into US Treasuries means both sides of international trade — surplus and deficit alike — become effective buyers of US Treasuries.
Stablecoin policy and trade policy are part of a coordinated strategy to extend US leverage. None of this is a cuddly technology upgrade: It is geopolitics. Charging ahead with an NT dollar stablecoin would put Taiwan in the crossfire — not only between private stablecoins and central bank digital currencies, but also amid competing jurisdictional pushes to shape the offshore US dollar marker — a battle it would be wise to avoid.
Taiwan’s instinct, shaped by decades of isolation, is to build its own stablecoin, but it does not need a blockchain or stablecoin to prove its sovereignty. Taiwan is already part of stablecoin history — in 2017, the operations of the largest stablecoin, tether, ran partly in Taiwan. The point now is to recognize what stablecoins really are — the offshore US dollar’s infrastructure, modernized and accelerated.
An NT dollar-denominated stablecoin is not unthinkable, but it would require more than tweaks to the market — it would mean reforming the trade-surplus model Taiwan has depended on for the past five decades, with deeper domestic bond markets, more competitive short-term rates and substantial non-resident demand for NT dollar assets. Until then, the obsession with minting a coin confuses means with ends.
Stablecoins are not a new currency for Taiwan to brand, they are the next phase of the US dollar system we already use to invoice, price and settle transactions. Rather than rushing to design a token with Taiwan’s flag, our opportunity lies in answering a more powerful question: How can we build on the foundation of US dollar-denominated networks — which already operate faster, cheaper and at a global scale — in ways that are commercially viable and beneficial to Taiwan?
This is not the time to plant a flag, it is the time to understand the terrain and quickly build on it.
James Lee is a senior adviser at the Taiwan External Trade Development Council.
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