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The central bank of Taiwan has finalized its feasibility study on wholesale Central Bank Digital Currency (CBDC) and is now actively considering its potential implementation. Deputy Governor Mei-lie Chu revealed on December 7 that the central bank is soliciting input from businesses and academics as it moves forward, focusing on refining platform design.
During an extensive presentation on “Banking 4.0,” a concept centered around services seamlessly integrated into customers’ daily lives, Chu emphasized the incorporation of artificial intelligence, advanced mobile technology, and digital innovations in banking. Notably, nearly half of her discourse delved into the subject of CBDC.
Citing research from the Bank for International Settlements, Chu acknowledged the benefits of CBDCs and the tokenization of real-world assets. She highlighted the role of a central bank currency with clearing finality as a fundamental operational foundation for tokenization. Chu specifically mentioned the potential of unified ledger technology, which utilizes a single ledger in a partitioned data environment for enhanced interoperability among systems.
According to CBDC Tracker, Taiwan initiated CBDC research in 2020, with more progress made in developing a retail CBDC, already tested in a pilot project involving consumers and five commercial banks.
Chu identified two critical challenges in Taiwan’s CBDC research: concerns related to bank disintermediation and achieving interoperability with existing payment systems. She emphasized a cautious approach to further CBDC development, refraining from specifying a timeline for a final decision.
In a related context, Fubon Bank in Taiwan collaborated with Ripple and the Hong Kong Monetary Authority for a reverse mortgage pilot project using Hong Kong’s e-HKD CBDC. Additionally, the bank has integrated China’s digital yuan, known as the e-CNY, into its platform, showcasing a proactive stance toward regional CBDC initiatives.
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