The President of Taiwan’s Central Bank, Yang Jinlong, has stressed that developing a central bank digital currency (CBDC) is not a competition and that the central bank focuses on steady progress over speed.
Yang stated that being the first to introduce a CBDC does not guarantee success, as countries that have already issued or tested CBDCs have not seen the desired outcomes, according to a July 7 news report by UDN.
Plans for Taiwan’s digital dollar
In his written report released today, before his presentation to the Finance Committee of the Legislative Yuan on Wednesday, Yang outlined the central bank’s plans for the digital New Taiwan Dollar.
Yang said the central bank is conducting experiments in three scenarios to enhance domestic payment efficiency and innovation. Although there is no timetable for the issuance of CBDC, efforts to improve the payment system’s processing efficiency and innovative applications are ongoing.
One significant development is the CBDC prototype platform designed for retail payments. According to Yang, this platform can already support the cash flow operation of digital coupons, with transaction processing speeds reaching 20,000 transactions per second (TPS).
Additionally, a proof-of-concept for wholesale CBDC is in the works. This initiative combines CBDC with bank deposit tokens to construct a future digital currency system. It aims to function as a liquidation asset for asset tokenization.
Tokenization technology plans
While the central bank is taking significant steps toward digital currency, it has clarified its position on virtual assets, stating that virtual assets like Bitcoin and stablecoins are not part of the digital currency system.
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The central bank plans to apply tokenization technology to digitally transform wholesale central bank currency and commercial bank currency, supporting various asset tokens. To further its objectives, Taiwan’s central bank is conducting proofs-of-concept and collaborating with participating banks to build a common platform for tokenization.
According to the report, this platform will be tested in three scenarios: inter-bank transfer of bank deposit tokens, simultaneous delivery of asset tokens (DVP), and special-purpose digital money.
Yang reiterated that Taiwan’s cautious approach toward issuing a CBDC is intended to meet public digital payment needs and align with government digital policy goals, ensuring substantial benefits.
In March, The Financial Supervisory Commission (FSC) announced that it would propose a new draft of digital asset regulations for Taiwan in September 2024. It aims to create more effective regulations for digital asset markets and to assure the safety of investors.
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