The Central Bank of the Republic of China, under the leadership of President Yang Chin-long, is taking a cautious approach to the launch of a central bank digital currency (CBDC). Yang emphasized that the main objective is not to be the first to launch a CBDC, but rather to ensure steady progress. He pointed out that other countries that have already issued or tested CBDCs have not achieved the desired results, according to a report by UDN.
In a recent report, Yang outlined the central bank’s plans for a digital New Taiwan dollar. During a meeting with the Finance Committee of the Legislative Yuan, he discussed ongoing experiments aimed at improving domestic payment efficiency and innovation. While there is no specific timetable for issuing a CBDC, efforts to enhance the payment system’s processing efficiency and applications are underway.
One development is the creation of a CBDC prototype platform designed for retail payments. Yang highlighted that this platform can support the cash flow operation of digital coupons and handle transaction processing speeds of up to 20,000 transactions per second. Additionally, the central bank is working on a proof-of-concept for a wholesale CBDC that combines CBDC with bank deposit tokens, laying the foundation for a more efficient financial system.
Yang stated that these scenarios are crucial in determining the best way to implement a CBDC that meets the public’s needs and aligns with government digital policy goals. Taiwan’s central bank is embracing tokenization technology to digitally transform wholesale central bank currency and commercial bank currency, supporting various asset tokens and facilitating a stronger digital economy. To achieve these goals, the 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. These tests are essential to ensure the platform’s efficiency and reliability. The Financial Supervisory Commission has also announced plans to propose new regulations for digital assets by September 2024.