Taiwan’s central bank has recently completed a feasibility study on the introduction of a wholesale central bank digital currency (CBDC) and is now actively considering its implementation.
Deputy Governor Mei-lie Chu announced on December 7th that the central bank is soliciting feedback from both businesses and academics while continuing to focus on the design of the CBDC platform.
During a comprehensive speech at a banking event, Chu introduced the concept of “Banking 4.0,” which she described as the integration of banking services into customers’ daily lives.
This integration involves harnessing the power of artificial intelligence and advanced mobile and digital technology within the banking sector, with particular emphasis on CBDCs.
Chu referenced research conducted by the Bank for International Settlements, highlighting the advantages of CBDCs and the tokenization of real-world assets.
She emphasized the role of a central bank currency with clearing finality as the foundation for tokenization, with a particular focus on unified ledger technology.
Unified ledger technology operates on a single ledger within a “partitioned data environment,” facilitating interoperability among different systems.
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According to CBDC Tracker, Taiwan initiated its CBDC research in 2020 and has made significant progress, especially in the development of a retail CBDC.
It has already conducted successful pilot tests involving consumers and five commercial banks.
Chu acknowledged that bank disintermediation and interoperability with existing payment systems remain key challenges in Taiwan’s CBDC research.
Consequently, the central bank is adopting a cautious approach to further CBDC development, refraining from setting a specific timeline for a final decision.
Additionally, Taiwan’s Fubon Bank has collaborated with Ripple and the Hong Kong Monetary Authority on a reverse mortgage pilot project, utilizing Hong Kong’s e-HKD CBDC. Furthermore, the bank has successfully integrated China’s digital yuan, known as the e-CNY, into its banking platform.
In summary, Taiwan’s central bank is actively exploring the feasibility of a wholesale CBDC, with a focus on incorporating advanced technology into banking services.
While challenges persist, the country has made significant strides in CBDC research, including successful pilot projects and collaborations with international partners.
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