In order to increase operational efficiency, the Central Bank of the Republic of China has proposed using special purpose tokens to manage government tenders. This would include using smart contracts for bids and performance bonds.
Yang Chin-long, president of the People’s Bank of China, has said that the creation of a CBDC is not a race and that the priority of the central bank is the preservation of steady development rather than the pursuit of speed.
According to a news article by UDN on July 7, Yang claims that being the first to introduce a CBDC does not ensure success. He cites the fact that nations who have issued or tested CBDCs before have not achieved the intended effects.
Before presenting the central bank’s proposals for a digital New Taiwan dollar to the Legislative Yuan’s Finance Committee on Wednesday, June 10, Yang published a study outlining those intentions on June 7.
According to Yang, the central bank is testing three different scenarios in an effort to boost innovation and efficiency in domestic payments. Efforts to enhance the processing efficiency and new uses of the payment system are continuing, even if there is no schedule for issuing a CBDC.
The CBDC prototype platform, which aims to facilitate retail payments, is one noteworthy advancement. Yang claims that the platform can handle 20,000 transactions per second, making it suitable for digital coupon cash flow operations.
Furthermore, a wholesale CBDC proof-of-concept is now in development. In order to build a digital currency system for the future, this proposal integrates CBDC with bank deposit tokens. Its intended use is as an asset tokenization liquidation asset.
In order to digitally convert wholesale and commercial bank currencies, the central bank intends to use tokenization technology, which will enable a variety of asset tokens. The central bank of Taiwan is teaming together with other participating institutions to develop a shared tokenization platform and is holding proof-of-concept events to achieve its goals.
This platform will reportedly undergo testing in three different use cases: digital money with a specific purpose, the simultaneous delivery of asset tokens, and the interbank transfer of bank deposit tokens.
According to Yang, Taiwan is taking its time issuing a CBDC so that it can fulfill the demands of public digital payments and achieve its digital policy objectives, all of which will have significant positive effects.
The Financial Supervisory Commission said in March that in September 2024, it would provide a revised set of rules for digital assets in Taiwan. To protect investors and provide more effective rules for digital asset markets, it seeks to do just that.
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