Yang Chin-long, President of the Central Bank of the Republic of China, emphasized that the pursuit of a central bank digital currency (CBDC) should prioritize methodical progress over a race to be first, noting that initial movers in the CBDC space have not universally achieved desired outcomes, as reported on July 7 by UDN.
Plans for Taiwan’s digital currency were detailed in a report preceding Yang’s presentation to the Legislative Yuan’s Finance Committee on June 10. He outlined ongoing experiments aimed at enhancing domestic payment efficiency and fostering innovation. While no specific timeline for CBDC issuance has been set, efforts continue to streamline payment processing and explore novel applications.
A notable stride includes the development of a CBDC prototype platform tailored for retail transactions. Yang highlighted its capability to handle digital coupon transactions at speeds up to 20,000 transactions per second. Concurrently, a proof-of-concept for a wholesale CBDC, integrating CBDC with bank deposit tokens, is underway, designed to serve as a foundational asset for tokenized assets.
The central bank intends to leverage tokenization technology to modernize both wholesale central bank currency and commercial bank currency, facilitating a variety of asset tokens. Collaborating with banks, Taiwan’s central bank aims to establish a unified tokenization platform, supporting applications such as inter-bank transfers of deposit tokens and specialized digital currencies.
Emphasizing cautious deliberation, Yang reiterated that Taiwan’s approach to CBDC issuance aims to meet public demand for digital payments while aligning with government digital policy objectives. In a related initiative, the Financial Supervisory Commission plans to propose updated digital asset regulations by September 2024 to enhance market integrity and investor protection.
For further insights into the transformative potential of digital currencies, explore our feature on how the digital yuan could reshape global dynamics, offering both promise and potential challenges.