The central bank of Taiwan has concluded a comprehensive feasibility and technology study on a central bank digital currency (CBDC), according to Deputy Governor Chu Mei-lie. Speaking at an event organized by Financial Information Service Co, Chu mentioned that the central bank is currently seeking feedback and refining the design of the CBDC platform.
Chu highlighted that CBDCs, akin to cryptocurrencies, differ in that their value is pegged by a government authority, making them equivalent to a national currency. She agreed with the Bank for International Settlements, noting that existing payment tools and platforms may not always meet the requirements of all-day transactions, smart contracts, and automatic settlements.
In her keynote speech, Chu outlined her perspective on the future of CBDCs, suggesting that a nation’s monetary system should support tokenized assets. CBDCs, she proposed, could offer ultimate payment and settlement services, encompassing tokenization and a unified ledger to seamlessly integrate CBDCs with traditional currencies.
The concept of a unified ledger, as explained by Chu, envisions the coexistence of tokenized ledgers for each economy connected through an application interface, ensuring interoperability and minimizing the risk of errors in message transmission. This approach is intended to expedite the clearing process, establish a secure trading environment, and facilitate safe, reliable, and efficient currency and asset transactions.
Chu emphasized that the central bank is taking a prudent approach to the CBDC issue and does not currently have a set timetable for reaching a conclusion. The bank intends to engage in discussions with academic and business sectors while continuously refining the platform design, transaction ease, capacity, and innovative functions. Additionally, offline transaction scenarios are being considered in the planning process. Foreign central banks are also exploring CBDC issuance to ensure a unified value for all forms of currency.
