Taiwan’s Fintech Frontier: Central Bank Concludes CBDC Study, Unveils Next Moves

Taiwan’s Possible CBDC Implementation

Taiwan’s central bank has concluded a feasibility study on the potential introduction of a wholesale central bank digital currency (CBDC) and is actively contemplating its implementation.

Deputy Governor Mei-lie Chu announced the ongoing solicitation of feedback from businesses and academics while concurrently focusing on the design aspects of the CBDC platform.

Taiwan “Banking 4.0” Vision

During a comprehensive speech at a banking event, Chu introduced the concept of “Banking 4.0,” envisioning the integration of banking services into customers’ daily lives.

This integration is set to harness the power of artificial intelligence and advanced mobile and digital technology within the banking sector, with a specific emphasis on the potential of CBDCs.

Chu referenced research conducted by the Bank for International Settlements, emphasising the advantages of CBDCs and the tokenisation of real-world assets.

She mentioned:

“A central bank currency with clearing finality can serve as the operational basis for tokenisation.”

She particularly highlighted the role of a central bank currency with clearing finality as the foundation for tokenisation, with a focus on unified ledger technology.

Unified ledger technology operates on a single ledger within a “partitioned data environment,” facilitating interoperability among different systems.

CBDC Progress and Challenges

According to CBDC Tracker, Taiwan initiated its CBDC research in 2020 and has made notable progress, especially in the development of a retail CBDC.

The country has already conducted successful pilot tests involving consumers and five commercial banks.

Despite these advancements, Chu acknowledged that challenges such as bank disintermediation and interoperability with existing payment systems remain integral aspects of Taiwan’s CBDC research.

Consequently, the central bank is adopting a cautious approach to further CBDC development, refraining from setting a specific timeline for a final decision.

Additionally, Taiwan’s Fubon Bank has engaged in collaborations, including a reverse mortgage pilot project with Ripple and the Hong Kong Monetary Authority, utilising Hong Kong’s e-HKD CBDC.

Furthermore, the bank has successfully integrated China’s digital yuan, known as the e-CNY, into its banking platform.

Taiwan’s CBDC Endeavours

Taiwan’s central bank is actively exploring the feasibility of a wholesale CBDC, placing a strong emphasis on incorporating advanced technology into banking services.

While challenges persist, including those related to bank disintermediation and system interoperability, the country has made strides in CBDC research, including successful pilot projects and collaborations with international partners.

* Original content written by Coinlive. Coinbold is licensed to distribute this content by Coinlive.