Nearly all countries are working on developing a Central Bank Digital Currency (CBDC), and Taiwan is no exception. The Central Bank of Taiwan has recently made significant progress in developing its own CBDC. Despite these developments, the bank emphasizes that there is no rush to introduce a Taiwanese CBDC.

A cautious approach

The Taiwanese central bank is currently in the experimentation phase, focusing on the functionalities of the CBDC in the retail sector. Yang Chin-Long, the governor of the central bank, emphasizes that the development of a Taiwanese CBDC is not seen as a race. He points out that several countries have already launched a CBDC without success. Taiwan wants to take its time to launch a well-functioning product that meets all the requirements.

The central bank has set up a CBDC pilot program, consisting of three phases. The first phase focuses on the transactions of tokens between participating banks. In the second phase, the system will be integrated with financial institutions. The third phase involves the full automation of the system through a tokenization platform.

In addition to a digital Taiwan dollar, there are also plans for the tokenization of existing assets. With this, Taiwan seems to want to use the full potential of blockchain technology. Participating entities will be able to use a new platform for this tokenization.

Future Plans for Taiwanese CBDC

Yang emphasizes Taiwan’s cautious approach to developing a CBDC. It is crucial that a Taiwanese CBDC offers a genuine improvement over the current system. According to Yang, this will take into account the wishes of the public sector. No timeline has been announced yet for the launch of the Taiwanese CBDC.

Taiwan is fast becoming a leader in crypto development. Within a few years, the country looks set to become a leading example in the Asian region. In September, the Taiwanese government will also propose a new legislative framework for crypto.

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