Taiwan's central bank has completed a feasibility study on wholesale central bank digital currency (CBDC) and is considering its introduction. Deputy Governor Mei-lie Chu outlined the concept of Banking 4.0, integrating AI and advanced technology into banking services. Chu emphasized the advantages of CBDCs and tokenization, citing a central bank currency with clearing finality as the operational basis for tokenization. Taiwan began CBDC research in 2020 and has conducted pilot projects, including testing retail CBDC with consumers and commercial banks.
Taiwan's central bank has completed a feasibility study on wholesale central bank digital currency (CBDC) and is considering its introduction. Deputy Governor Mei-lie Chu outlined the concept of Banking 4.0, integrating AI and advanced technology into banking services. Chu emphasized the advantages of CBDCs and tokenization, citing a central bank currency with clearing finality as the operational basis for tokenization. Taiwan began CBDC research in 2020 and has conducted pilot projects, including testing retail CBDC with consumers and commercial banks.
Key Points:
CBDC Feasibility Study: Taiwan's central bank has concluded a feasibility study on wholesale CBDC and is seeking feedback from businesses and academics. The study explores the potential introduction of a wholesale CBDC, focusing on clearing finality and tokenization of real-world assets.
Banking 4.0: Deputy Governor Mei-lie Chu presented the concept of Banking 4.0, emphasizing services embedded in customers' daily lives. The integration of artificial intelligence and advanced mobile and digital technology into banking services is a key component of this vision.
Advantages of CBDCs: Chu highlighted the advantages of CBDCs and the tokenization of real-world assets. A central bank currency with clearing finality can serve as the operational basis for tokenization, offering potential benefits in terms of efficiency and interoperability.
Unified Ledger Technology: Chu mentioned unified ledger technology, which utilizes a single ledger in a partitioned data environment to achieve interoperability among systems. This approach could address challenges related to bank disintermediation and enhance interoperability with other payment systems.
Retail CBDC Testing: Taiwan has progressed in the development of a retail CBDC and conducted pilot projects, including testing with consumers and five commercial banks. The central bank is taking a prudent approach to further CBDC development, with no specific timeline for a decision.
Collaboration with Ripple and Hong Kong's e-HKD CBDC: Fubon Bank in Taiwan has participated in a reverse mortgage pilot project with Ripple and the Hong Kong Monetary Authority, using Hong Kong's e-HKD CBDC. The bank has also integrated China's digital yuan (e-CNY) into its platform.
Taiwan's exploration of CBDCs reflects a broader trend in central banks worldwide, with a focus on leveraging emerging technologies to enhance the efficiency and capabilities of financial systems. The completion of the CBDC feasibility study and ongoing initiatives demonstrate Taiwan's commitment to staying at the forefront of digital innovation in banking.
(DEREK ANDERSEN, COINTELEGRAPH, 2023)