Taiwan's central bank governor Yang Chin-long reports on the progress of the CBDC trial: System completed ahead of schedule, allowing bank deposits to be exchanged and enabling small-scale cross-border remittances for migrant workers.

On June 29th, Taiwan's Central Bank Governor Yang Chin-long mentioned the progress of Taiwan's trial on Central Bank Digital Currency (CBDC) during his speech at a financial company. The key points are as follows:

On June 29th, Yang Chin-long, the Governor of the Central Bank of Taiwan, mentioned the progress of Taiwan's experiments on CBDC in his speech at the Financial Institutions. The key points are as follows:

1. Taiwan aligning with international standards:

• In June 2020, the feasibility assessment of wholesale CBDC usage between financial institutions was completed, indicating that DLT distributed ledger technology cannot meet the high-frequency, high-volume, and real-time clearing needs.
• In September 2020, the feasibility assessment for general CBDC public usage was completed, concluding that a centralized architecture is needed, with some functions designed using DLT. It is expected to complete the platform prototype by September 2022 and simulate retail payment scenarios, which have already been completed ahead of schedule.

2. Next-phase plans:

• Due to the pandemic, actual retail trials of general CBDC have not been conducted, only showcased at the Financial Institutions Annual Meeting.
• Currently, design and simulation experiments involve five banks: China Trust, Hua Nan, Shanghai, Cathay United, and Taishin, to integrate practical banking financial intermediation operations. This means the central bank provides CBDC to banks, banks provide it to the public, and the public simulates retail payment usage scenarios.
• Showcasing the opening of CBDC wallets by banks and the exchange between deposits; for those without bank accounts, exchanges between cash and CBDC can be done through ATMs. CBDC can also facilitate small cross-border remittances for migrant workers and issue digital vouchers.
• Demonstrating the scanning and contactless payment features of CBDC in actual payments.

The Central Bank of Taiwan believes that the key difference between CBDC and electronic payments lies in "payment ubiquity," where it can be used in any store at any time; it also aids in foreign exchange, remittances, and payments for foreigners.

The central bank stated that it will consider a more modernized system architecture to adapt to technological advancements. Research on CBDC will help in the future development of new systems. Detailed planning will be carried out regarding communication with institutions and society, technological maturity, and regulatory aspects.

The Central Bank of Taiwan mentioned that although China and Sweden have conducted CBDC trials/experiments, there has been no official announcement of the issuance date. CBDC still needs improvement in various aspects to gain public trust; major countries are not rushing to issue it, aiming to align with policies and public expectations. In the future, the central bank will construct the CBDC ecosystem based on the principles of the BIS and major central banks: harmlessness, coexistence, innovation, and efficiency.

Overall, the research and trial results do not mean that Taiwan will immediately implement CBDC, as it requires a more comprehensive framework and will only be launched based on policy and societal needs.