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Yang Chin-long, President of the Central Bank of the Republic of China, emphasized that the development of a central bank digital currency (CBDC) should prioritize steady progress rather than speed. Speaking on the issue, Yang noted that the race to be the first to introduce a CBDC does not guarantee success, pointing out that countries that have already issued or tested CBDCs have not necessarily achieved their desired outcomes. This statement was reported by UDN on July 7.
Plans for Taiwan’s Digital Dollar
In a report released on June 7, ahead of his presentation to the Finance Committee of the Legislative Yuan on June 10, Yang detailed the central bank’s plans for a digital New Taiwan dollar. The central bank is experimenting with three scenarios to enhance domestic payment efficiency and foster innovation. Although there is no fixed timetable for issuing a 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. This platform can already support the cash flow operation of digital coupons, achieving transaction processing speeds of up to 20,000 transactions per second.
Additionally, a proof-of-concept for a wholesale CBDC is being developed. This initiative combines CBDC with bank deposit tokens to create a future digital currency system, functioning as a liquidation asset for asset tokenization.
Tokenization Technology Plans
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.
This platform will be tested in three scenarios: inter-bank transfer of bank deposit tokens, simultaneous delivery of asset tokens, 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.
Upcoming Digital Asset Regulations
In March, the Financial Supervisory Commission announced plans to propose a new draft of digital asset regulations for Taiwan by September 2024. This initiative aims to create more effective regulations for digital asset markets and ensure the safety of investors.
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