Yang Chin-long, the President of the Central Bank of the Republic of China (Taiwan), said that the development of a central bank digital currency (CBDC) will not be rushed, unlike other countries. Yangâs comments highlight the nationâs cautious approach to CBDC creation, aiming for a stable debut than a rushed creation.
Interestingly, CBDC has been the topic debate in the crypto space with politicians divided on the same. Some believe that blockchain-based fiat currencies are a huge hurdle to individual privacy.
Strategic Approach to CBDC
Yang cautioned against viewing CBDC development as a competition, noting that countries that have already issued or tested CBDCs have not necessarily achieved the anticipated results. His stance underscores Taiwanâs methodical approach to enhance domestic payment efficiency and foster innovation in financial transactions.
Plans and Initiatives
In a detailed report released before his presentation to the Finance Committee of the Legislative Yuan on June 10, Yang outlined Taiwanâs plans for a digital New Taiwan dollar. The central bank is currently conducting experiments across three scenarios to improve payment system efficiency and explore innovative applications.
One notable advancement is the development of a CBDC prototype platform tailored for retail payments. Yang revealed that this platform can facilitate digital coupon transactions at impressive speeds, handling up to 20,000 transactions per second.
Wholesale CBDC and Tokenization
Alongside retail solutions, Taiwanâs central bank is advancing a proof-of-concept for a wholesale CBDC. This initiative integrates CBDC with bank deposit tokens, aiming to establish a robust digital currency ecosystem that supports asset tokenization and serves as a liquidity asset.
Furthermore, the central bank plans to leverage tokenization technology to transform wholesale central bank currency and commercial bank currency. This approach supports diverse asset tokens and is part of Taiwanâs broader efforts to collaborate with banks on a unified tokenization platform.
Regulatory Landscape
Addressing the regulatory environment, Yang affirmed that Taiwanâs cautious approach aligns with public digital payment needs and government digital policy goals. This strategy aims to ensure substantial benefits while mitigating potential risks associated with digital currency adoption.
In March, Taiwanâs Financial Supervisory Commission announced plans to introduce updated digital asset regulations by September 2024. These regulations aim to enhance market effectiveness and investor protection within the digital asset sector, reflecting Taiwanâs proactive stance on financial innovation.
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