CBDC Launch No Priority in Taiwan

The President of the Central Bank of the Republic of China, Yang Chin-long, stated that developing a central bank digital currency (CBDC) is not a competition. He emphasized that the central bank prioritizes steady progress over speed.

Yang mentioned that being the first to introduce a CBDC does not guarantee success, citing that countries with existing CBDCs have yet to achieve the desired outcomes. UDN reported this on July 7.

Taiwan’s Digital Dollar Plans

Yang also detailed the central bank’s digital New Taiwan dollar plans. Also, this report preceded his presentation to the Finance Committee of the Legislative Yuan on June 10. The central bank conducts experiments in three scenarios to enhance domestic payment efficiency and foster innovation. Although there is no set timetable for issuing a CBDC, the central bank continues improving the payment system’s processing efficiency and exploring innovative applications.

One notable development is the CBDC prototype platform designed for retail payments. Yang mentioned that this platform can support the cash flow operation of digital coupons, with transaction processing speeds reaching 20,000 transactions per second.

Wholesale CBDC and Tokenization

The central bank is also working on a proof-of-concept for a wholesale CBDC. This project aims to combine CBDC with bank deposit tokens to create a future digital currency system that can serve as a liquidation asset for asset tokenization. The central bank plans to apply tokenization technology to digitally transform both wholesale central bank currency and commercial bank currency, supporting various asset tokens. Proofs-of-concept are being conducted with participating banks to build a common platform for tokenization. This platform will be tested in scenarios such as inter-bank transfer of bank deposit tokens and simultaneous delivery of asset tokens and special-purpose digital money.

In March, the Financial Supervisory Commission announced plans to propose new digital asset regulations by September 2024. This initiative aims to create more effective regulations for digital asset markets and ensure investor safety.

Yang reiterated that Taiwan’s careful approach towards issuing a CBDC is designed to meet public digital payment needs and align with government digital policy goals.