The Central Bank of Taiwan (CBDC) has finished its feasibility assessment and is now considering implementing it on a wholesale scale.
As the country investigates more extensive payment modernization programs, Deputy Governor Mei-lie Chu stresses the need for a cautious approach and solicits opinions from companies and universities.
Chu highlights the benefits of CBDCs and tokenization of real-world assets, drawing on research from the Bank for International Settlements. This highlights the integration of blockchain technology. Highlighting the importance of unified ledger technology in attaining interoperability, Taiwan demonstrates its determination to remain a leader in digital currency innovation.
After Taiwan’s central bank completed a feasibility study, central bank digital currency (CBDC) is being seriously considered for adoption. On December 7, Deputy Governor Mei-lie Chu made the announcement that the central bank has completed its research and is now talking to companies and universities to figure out what to do next. As Taiwan explores the world of Banking 4.0, efforts to modernize payments are front and center, with a particular emphasis on CBDC.
During a lengthy address at a banking event, Deputy Governor Chu presented Taiwan’s vision for Banking 4.0, which centers on services that are seamlessly integrated into clients’ everyday lives. Part of the plan is to revamp banking processes by using state-of-the-art digital and mobile technologies and artificial intelligence. The fact that CBDC took up over half of Chu’s presentation shows that the central bank is really interested in promoting digital currency alternatives.
Deputy Governor Mei-lie Chu emphasized the many advantages of Central Bank Digital Currencies (CBDCs) and the tokenization of physical assets, using knowledge from BIS research. A central bank currency with obvious finality might serve as the operational foundation for tokenization procedures, according to Chu. The idea is to make sure that blockchain transactions can’t be undone, which would provide a safe way to represent physical products digitally.
Additionally, Deputy Governor Chu emphasized the relevance of unified ledger technology within this framework. One way unified ledger technology promotes interoperability is by using a single ledger in a partitioned data environment. This method is an important part of investigating CBDCs and getting more people to use tokenization in the financial sector because of how it simplifies and improves transaction efficiency.
In 2020, Taiwan began studying CBDCs, with an emphasis on retail and wholesale CBDCs. After a successful pilot project with five commercial banks and customers, the nation has come a long way toward creating a retail CBDC. Important considerations for the creation of a CBDC have been the difficulties associated with bank disintermediation and compatibility with current payment systems, both of which have been the subject of continuing study.
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