- Taiwan’s Central Bank is exploring special-purpose tokens for government tenders to improve transparency and streamline processes.
- Yang Chin-long emphasizes cautious CBDC development, prioritizing sustainable growth over being first-to-market.
- The CBDC prototype platform in Taiwan supports digital coupon transactions at speeds of up to 20,000 per second, enhancing retail payment efficiency.
The Central Bank of the Republic of China is making major efforts to increase operational efficiency through digital transformation. UDN reported on July 7 that the bank is adopting special-purpose tokens to handle government tenders. These tokens will utilize smart contracts for bids and performance bonds to streamline processes and enhance transparency.
Yang Chin-long, President of the Central Bank, underlined that establishing a central bank digital currency (CBDC) is geared toward steady growth rather than haste. Yang pointed out that being the first to introduce a CBDC does not ensure success, as many countries that have already issued or tested CBDCs have not seen the intended results.
The central bank is testing three scenarios to increase domestic payment efficiency and creativity. Although there is no clear schedule for granting a CBDC, attempts to improve the payment system’s processing efficiency and new uses continue.
One major breakthrough is the CBDC prototype platform for retail payments. This technology supports the cash flow operation of digital coupons, with transaction processing speeds reaching 20,000 transactions per second.
Additionally, a proof-of-concept for a wholesale CBDC, which combines CBDC with bank deposit tokens to construct a future digital currency system, is being developed. It aims to function as a liquidation asset for asset tokenization, where the central bank plans to apply tokenization technology to digitally transform wholesale central bank currency and commercial bank currency.
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In order to further its objectives, Taiwan’s central bank is conducting proof-of-concept and collaborating with participating banks to build a common platform for tokenization. The platform will be tested in three scenarios which include inter-bank transfer of bank deposit tokens, simultaneous delivery of asset tokens, and special-purpose digital money.
In March, the Financial Supervisory Commission indicated it would present a revised draft of Taiwan’s digital asset legislation in September 2024. The project intends to provide more effective laws for digital asset markets while ensuring investor safety.
Taiwan’s central bank is making strides in the digital currency space as the country aims to enhance payment efficiency and innovation by focusing on steady progress and thorough experimentation.
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