The Central Bank of Taiwan disclosed plans for the development of a central bank digital currency (CBDC) that emphasizes steady progress rather than speed. President, Yang Chin-long, refuted the idea that being the first to launch a CBDC ensures success. Citing unmet outcomes in countries that have already tested or issued their own CBDCs.
The digital New Taiwan dollar is currently in the works, with no set timetable for issuance. The Central Bank focuses on experiments to enhance payment efficiency and innovation across three scenarios. Notably, a prototype platform for retail payments has been developed which supports digital coupon transactions at an impressive speed of 20,000 transactions per second.
Additionally, a wholesale CBDC proof-of-concept is on track integrating CBDC with bank deposit tokens to establish a future digital currency system. This aims to operate as a liquidation asset for asset tokenization.
The Central Bank also intends to use tokenization technology to digitally morph wholesale central bank currency and commercial bank currency, accommodating various asset tokens. Collaborations with participating banks are underway to build a shared platform for tokenization. This platform will be tested across three scenarios: inter-bank transfers of bank deposit tokens, simultaneous delivery of asset tokens, and special-purpose digital money.
Yang iterated that Taiwan’s cautious approach towards creating a CBDC is designed to address public digital payment needs and align with government digital policy objectives, ensuring substantial benefits. Notably, the Financial Supervisory Commission announced in March that it will propose a new draft of digital asset regulations in September 2024, to ensure more effective regulations for digital asset markets and safeguard investors.