Taiwan Central Bank Advances Research on CBDC with Emphasis on Public Consultation

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The Central Bank of Taiwan has made significant strides in its research the development of a Central Bank Digital Currency (CBDC), culminating in the development of a prototype platform. Emphasising that the promotion of CBDC is not a global race, the central bank has announced plans to hold numerous public hearings and briefings in 2025 to discuss the legal framework and other pertinent issues.

On the 8th July, the Finance Committee of the Legislative Yuan was scheduled to host Central Bank President Yang Jinlong, who according to a report from CNA presented a special report titled “Planning for Digital Currency Issuance and Digital Transformation of Currency”, outlining the central bank’s strategic plan for digital currency.

Since embarking on this journey in 2019, the central bank has completed the second phase of its CBDC research and testing, and is now in the prototype construction phase, keeping pace with other advanced economies.

The central bank has highlighted the development of a prototype CBDC platform and its intention to use a two-tier issuance structure. Initially, no interest will be calculated on the issued digital currency, although an interest-bearing feature will be retained for future use. The proposed wallet system will be divided into bearer and registered wallets. Additionally, the design will address privacy and personal data protection, information security management, and various retail payment functionalities.

Recognising the broad array of stakeholders involved, the central bank stressed the importance of extensive and prudent preliminary communication. Results from an outsourced bond inquiry survey have been published, and the bank plans to conduct several public hearings, briefings, and forums in 2025. These efforts aim to foster more extensive and detailed exchanges with the public and enhance awareness and understanding of the CBDC.

Reiterating that the promotion of CBDC is not an international competition, the central bank pointed out that Taiwan’s diverse payment facilities necessitate a cautious approach to CBDC issuance. The primary objective is to ensure that the implementation of CBDC aligns with the public’s digital payment needs and supports the government’s digital policy goals to yield tangible benefits.

Looking ahead, the central bank intends to continue refining platform technology and commence collaborations with the Ministry of Digital Development’s “CBDC Prototype Platform” and “Government Agency Issuance Shared Platform.” This partnership will enable government agencies to issue digital coupons via the Ministry’s platform, with the central bank managing the disbursement, settlement, and liquidation of funds following the consumption of digital coupons in users’ wallets.

Furthermore, the central bank plans to leverage tokenization technology for the digital transformation of wholesale central bank currency and commercial bank currency, facilitating the development of various asset tokens. It is currently planning a proof-of-concept for wholesale CBDC, positioning wholesale CBDC as the settlement asset for asset tokenization, and combining it with bank deposit tokens to construct a comprehensive future digital currency system.

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