Taiwan Central Bank Prioritizes CBDC Development Over Speed

Focus on Measured Progress

The crypto news states that- The Central Bank of the Republic of China (Taiwan) is adopting a cautious approach to developing a central bank digital currency (CBDC), prioritizing stability and thoroughness over rapid implementation.

President Yang Chin emphasized that the introduction of a CBDC is not a race and that the central bank is committed to ensuring meaningful and beneficial outcomes. Highlighting that early adopters of CBDCs have not necessarily achieved the desired results, Yang stressed the importance of well-grounded and beneficial progress.

Advancements in CBDC Prototypes

In a report presented on June 7, Yang detailed the central bank’s ongoing experiments aimed at enhancing domestic payment systems. A notable development is the CBDC prototype platform designed for retail payments, capable of processing up to 20,000 transactions per second.

Additionally, a wholesale CBDC proof-of-concept is being developed, integrating CBDC with bank deposit tokens to create a future-ready digital currency system. This system aims to serve as a liquidation asset for asset tokenization, enhancing the efficiency and innovation of the payment processing system.

Tokenization and Future Regulations

The central bank is also exploring tokenization technology to digitize both wholesale central bank currency and commercial bank currency. This initiative involves conducting proofs-of-concept and collaborating with participating banks to establish a common platform for tokenization. The 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 to issuing a CBDC is designed to meet public digital payment needs while aligning with government digital policy goals. Additionally, the Financial Supervisory Commission announced plans to propose new digital asset regulations in September 2024, aiming to create effective regulatory frameworks for digital asset markets and enhance investor protection.