The President of the Central Bank of the Republic of China, Yang Chin-long, emphasized that the development of a central bank digital currency (CBDC) is not a race, underscoring the importance of steady progress over speed. Yang pointed out that simply being the first to introduce a CBDC does not guarantee success, citing instances where countries that have already issued or tested CBDCs did not achieve their desired outcomes, as reported on July 7 by UDN.
Digital Dollar Plans for Taiwan
In a report disclosed on June 7 ahead of his presentation to the Finance Committee of the Legislative Yuan on June 10, Yang detailed the central bank’s roadmap for a digital New Taiwan dollar. He highlighted ongoing experiments in three scenarios aimed at improving domestic payment efficiency and fostering innovation. While no specific timeline for CBDC issuance has been set, efforts continue to enhance payment processing efficiency and explore innovative applications.
A notable advancement includes a prototype platform for retail CBDC payments. Yang noted that this platform can currently facilitate the operation of digital coupons, achieving transaction speeds of up to 20,000 transactions per second. Additionally, work is underway on a proof-of-concept for a wholesale CBDC that integrates CBDC with bank deposit tokens to establish a future digital currency system, designed to serve as a liquidity asset for asset tokenization.
Tokenization Technology Strategies
The central bank intends to leverage tokenization technology to digitally transform both wholesale central bank currency and commercial bank currency, supporting a range of asset tokens. To advance these goals, Taiwan’s central bank is conducting proof-of-concepts and collaborating with participating banks to develop a unified tokenization platform.
In related developments, Taiwan has proposed stricter anti-money laundering measures for cryptocurrency service providers. According to reports, this platform will undergo testing in three scenarios: inter-bank transfers of bank deposit tokens, simultaneous issuance of asset tokens, and specialized digital currencies.
Yang reiterated Taiwan’s cautious approach to CBDC issuance, aimed at meeting public digital payment needs and aligning with government digital policy objectives to deliver substantial benefits. In March, the Financial Supervisory Commission announced plans to propose new regulations for Taiwan’s digital asset markets by September 2024, aiming to enhance market regulation and investor protection.
Magazine: How the digital yuan could change the world… for better or worse