The President of the Central Bank of the Republic of China, Yang Chin-long, emphasized that developing a central bank digital currency (CBDC) should not be viewed as a competition. Instead, the central bank prioritizes steady progress over speed.
Yang pointed out that being the first to launch a CBDC does not ensure success, as seen in countries that have already issued or tested CBDCs without achieving the desired results. This statement was made in a July 7 news report by UDN.
### Taiwan’s Digital Dollar Plans
In a June 7 report, preceding his presentation to the Finance Committee of the Legislative Yuan on Wednesday, June 10, Yang detailed the central bank’s plans for a digital New Taiwan dollar. He mentioned that the central bank is experimenting with three scenarios to enhance domestic payment efficiency and innovation. While there is no fixed timeline for the issuance of a CBDC, efforts to improve the payment system’s processing efficiency and introduce innovative applications are ongoing.
One notable development is the CBDC prototype platform for retail payments. According to Yang, this platform can already support the cash flow operation of digital coupons, achieving transaction processing speeds of up to 20,000 transactions per second.
Additionally, a proof-of-concept for a wholesale CBDC is being developed. This initiative aims to integrate CBDC with bank deposit tokens, creating a future digital currency system that functions as a liquidation asset for asset tokenization.
### Tokenization Technology Plans
The central bank plans to leverage tokenization technology to digitally transform both wholesale central bank currency and commercial bank currency, supporting various asset tokens. To achieve this, Taiwan’s central bank is conducting proofs-of-concept and collaborating with participating banks to build a common platform for tokenization.
This platform will be tested in three scenarios: inter-bank transfer of bank deposit tokens, simultaneous delivery of asset tokens, and special-purpose digital money.
Yang reiterated that Taiwan’s cautious approach towards issuing a CBDC aims to meet public digital payment needs and align with government digital policy goals, ensuring substantial benefits.
In March, the Financial Supervisory Commission announced plans to propose new draft regulations for digital assets in Taiwan by September 2024. These regulations aim to create a more effective framework for digital asset markets and ensure investor safety.
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