By Edith Chiu
Artificial intelligence, blockchain, and digital assets are rapidly transforming the way financial services operate. From AI agents assisting consumers with searches, decision-making, and payments, to the use of stablecoins in cross-border transactions and settlement, and the tokenization of real-world assets, technological innovation is creating new business models while also introducing new challenges in financial regulation, cybersecurity, compliance, and accountability.
In response to the accelerating convergence of digital technology and the financial industry, the Taiwan Digital Governance Association organized a forum on digital finance. The event brought together experts from Taiwan and abroad with experience in fintech, artificial intelligence, blockchain, financial regulation, and digital transformation. Discussions focused on AI applications in finance, stablecoin regulation and implementation, and real-world asset tokenization.
The event went beyond introducing emerging technologies. It placed particular emphasis on the governance frameworks, legal responsibilities, and risk management mechanisms required when these technologies enter real-world financial environments. Through cross-disciplinary and international exchange, the Association sought to promote greater understanding and cooperation among government, industry, academia, and professional communities, while encouraging further discussion on Taiwan’s future role in the development of digital finance.
AI Is Redefining Financial Services and Transaction Relationships
Artificial intelligence is evolving from a supporting tool into a core component of enterprise and financial infrastructure. Generative AI can now be used not only for customer service, data analysis, and marketing content, but also for product searches, travel planning, transaction decisions, and payment processes.
As AI agents begin to conduct transactions on behalf of users, the traditional concepts of identity, authorization, and accountability within the financial system will also change. Financial institutions will need to determine who authorized the AI, what actions it is permitted to perform, what transaction limits apply, and who should be held responsible when an error, fraud, or cybersecurity incident occurs.
These questions demonstrate that AI applications in finance cannot be assessed solely in terms of technical performance or operational efficiency. They must also be supported by mechanisms for identity verification, access control, transaction logging, risk monitoring, and the allocation of responsibility.
The forum also highlighted that companies relying only on conventional financial or information technology perspectives may face strategic and organizational blind spots when responding to AI, digital assets, and blockchain. Effective digital transformation requires meaningful communication and collaboration among policy, finance, compliance, cybersecurity, and technology teams.
Stablecoin Regulation Is Expanding from Anti-Money Laundering to Comprehensive Governance
Stablecoins are generally designed to maintain a relatively stable value by referencing fiat currencies or other assets. As their use expands into cross-border payments, fund transfers, asset transactions, and financial settlement, their impact is no longer confined to the cryptoasset market. Stablecoins are increasingly becoming part of the broader financial system.
Early international regulatory approaches primarily focused on anti-money laundering and countering the financing of terrorism. In recent years, however, regulatory attention has expanded to include investor protection, market integrity, reserve asset management, redemption mechanisms, financial stability, and prudential supervision.
Through an examination of regulatory developments in the European Union, Hong Kong, the United States, and other Asian markets, the forum demonstrated how international regulation is moving from reactive risk management toward more comprehensive legal and licensing frameworks.
One important regulatory principle is “same activity, same risk, same regulation.” Financial services should not be exempt from regulatory or compliance obligations simply because they are delivered through blockchain technology or tokenized structures. Their supervision should reflect the actual functions they perform and the risks they create.
Whether stablecoins can gain long-term market confidence depends not only on technological innovation, but also on the adequacy of reserve assets, the reliability of redemption arrangements, the effectiveness of transaction monitoring, and the financial and governance capacity of issuers.
From this perspective, clear regulation should not be viewed merely as an obstacle to innovation. It is an essential foundation for market confidence and sustainable development.
From Concept to Implementation: How Stablecoins Could Enter Banking and Cross-Border Payments
Traditional cross-border payments often pass through multiple intermediary banks and national clearing systems. This process may involve lengthy settlement times, higher transaction fees, foreign exchange costs, and significant capital tied up during settlement.
Stablecoins use blockchain-based, peer-to-peer transfers and therefore have the potential to provide near-instant settlement, continuous availability, and lower intermediary costs. Their possible applications are gradually expanding beyond cryptoasset trading to cross-border payments, foreign exchange transactions, interbank transfers, bonds, and other financial markets.
However, financial institutions that adopt stablecoins must still comply with bank-grade requirements for customer identification, anti-money laundering, counter-terrorist financing, transaction monitoring, cybersecurity, and asset custody.
The practical models introduced during the forum showed that a stablecoin ecosystem involves far more than issuing a digital token. It requires the integration of identity authentication, wallet management, on-chain address analysis, transaction risk classification, asset reserves, and clearing and settlement mechanisms.
Through digital certificates, public key infrastructure, and on-chain risk analysis, financial institutions may identify transaction addresses, assess risk levels, and determine whether a transaction should be approved, restricted, rejected, or frozen. These mechanisms can help bridge the gap between the speed of blockchain-based transactions and the compliance obligations of regulated financial institutions.
The ability of stablecoins to enter mainstream financial markets will therefore depend not only on speed and cost, but also on whether the surrounding ecosystem is secure, compliant, traceable, and subject to effective supervision.
RWA Tokenization Creates New Possibilities for Traditional Assets
Real-world asset tokenization refers to the use of blockchain technology to represent assets and rights with economic value, such as real estate, bonds, funds, accounts receivable, carbon credits, and other forms of property, as digital tokens that can be managed or traded.
Many traditional assets are characterized by high investment thresholds, limited liquidity, fragmented markets, and geographic restrictions. Tokenization may allow such assets to be divided into smaller units, providing a broader range of market participants with access to assets that were previously difficult to trade. It may also improve the efficiency of transactions, settlement, and the transfer of rights.
However, RWA tokenization does not simply mean placing asset information on a blockchain. The on-chain token must be clearly and legally connected to the underlying off-chain asset, associated rights, and cash flows.
The forum emphasized that large-scale adoption of RWA tokenization requires solutions to issues involving ownership, legal enforceability, valuation, disclosure, custody, cross-border regulation, technical standards, and secondary-market liquidity.
If investors cannot verify that the asset represented by a token actually exists, or cannot effectively exercise their rights in the event of default, tokenization will struggle to establish lasting trust.
The development of RWA therefore extends beyond blockchain technology. It requires collaboration among financial institutions, legal professionals, accountants, valuation specialists, technology providers, and regulatory authorities.
Trust and Governance Remain at the Core of Digital Finance
Although AI, stablecoins, and RWA tokenization are based on different technologies and application models, they raise many of the same governance questions:
Who is authorized to conduct a transaction on behalf of a user?
How should identity and authorization be verified?
How should transaction records be preserved and validated?
How can risks be identified in real time?
How should responsibility be allocated when losses or errors occur?
How should different jurisdictions and regulatory systems coordinate with one another?
Technology can improve the speed and efficiency of financial services, but technology alone does not automatically create trust. Trust depends on clear rules, verifiable processes, effective risk controls, and defined accountability.
For this reason, digital governance should not be treated as a remedial measure introduced only after innovation has taken place. Security, compliance, ethics, and the public interest should be incorporated into the design of technologies, products, and institutions from the outset.
Connecting Technology, Institutions, and Society Through Cross-Sector Dialogue
