Taiwan’s Central Bank Adopts a Prudent Approach
YEREVAN (CoinChapter.com) — The Central Bank of the Republic of China, under the leadership of President Yang Chin-long, has opted for a cautious strategy regarding the introduction of a central bank digital currency (CBDC). Yang stressed that their aim is not to be the first but to ensure steady progress. He pointed out that other countries which have already issued or tested CBDCs have not achieved the desired outcomes, as reported on July 7 by UDN.
In a report dated June 7, Yang outlined the central bank’s plans for a digital New Taiwan dollar. Addressing the Finance Committee of the Legislative Yuan on June 10, he detailed ongoing experiments aimed at enhancing domestic payment efficiency and fostering innovation. Currently, there is no fixed timetable for the CBDC launch; however, efforts are underway to improve the processing efficiency and applications of the payment system.
Advancements in Payment Speed and Efficiency Testing
One notable development is the establishment of a CBDC prototype platform tailored for retail payments. Yang emphasized that this platform can support the operational flow of digital coupons and process transactions at speeds of up to 20,000 per second.
Furthermore, the central bank is engaged in a proof-of-concept for a wholesale CBDC. This initiative seeks to integrate CBDC with bank deposit tokens to construct a future digital currency system. The objective is to function as a settlement asset for asset tokenization, laying the groundwork for a more efficient financial ecosystem.
Yang explained, “These scenarios are pivotal in determining the optimal approach for implementing a CBDC that aligns with public needs and government digital policy objectives.”
Taiwan Central Bank Champions Tokenization for Digital Economy
Taiwan’s central bank aims to leverage tokenization technology to digitally transform wholesale central bank and commercial bank currencies. This transformation supports various asset tokens, thereby facilitating a resilient digital economy. To achieve these goals, the central bank is conducting proofs-of-concept and collaborating with participating banks to establish a unified tokenization platform.
This platform will undergo testing across three scenarios: inter-bank transfers of bank deposit tokens, simultaneous delivery of asset tokens, and specialized digital currencies. These tests are crucial for ensuring the platform’s efficiency and reliability.
In March, the Financial Supervisory Commission unveiled plans to introduce a revised draft of digital asset regulations by September 2024.
Taiwan’s New Virtual Currency Law Draft. Source: Financial Supervisory Commission Announcement