Focus on measured progress
According to cryptocurrency news, the Central Bank of the Republic of China (Taiwan) is taking a cautious approach to developing a central bank digital currency (CBDC), prioritizing stability and thoroughness over rapid implementation.
Governor Yang emphasized that CBDC adoption is not a competition and that central banks are committed to ensuring meaningful and beneficial outcomes. While emphasizing that early adopters of CBDCs have not necessarily achieved the desired outcomes, Governor Yang stressed the importance of grounded and beneficial progress.
Development of CBDC prototype
In a report published on June 7, Yang detailed the central bank’s ongoing experiments to improve the country’s payment system. A notable development is a CBDC prototype platform designed for retail payments that can process up to 20,000 transactions per second.
Additionally, a proof of concept for a wholesale CBDC is being developed that integrates CBDC with bank deposit tokens to create a future-proof digital currency system. This system aims to enhance the efficiency and innovation of the payment processing system by acting as a clearing asset for asset tokenization.
Tokenization and Future Regulation
The central bank is also exploring tokenization technologies to digitize both wholesale central bank money and commercial bank money. The initiative involves conducting a proof of concept and working with participating banks to build a common platform for tokenization. The platform will be tested in three scenarios: interbank transfers of bank deposit tokens, simultaneous transfers of asset tokens, and special purpose digital currencies.
Yang reiterated that Taiwan’s cautious approach to CBDC issuance is designed to meet public digital payment needs while being consistent with the government’s digital policy goals. The Financial Supervisory Commission also announced plans to propose new digital asset regulations in September 2024, aiming to create an effective regulatory framework for the digital asset market and enhance investor protection.