Central Bank Governor Yang Chin-long: CBDC is not a competition among nations, analyzing three potential scenarios for the application of digital NT, no issuance expected yet

The President of the Central Bank, Yang Chin-long, detailed the development plan for the digital New Taiwan Dollar in a public speech yesterday, 5/7, emphasizing that the promotion of the digital currency CBDC is not a matter of international competition. Today, Yang Chin-long will attend a special report at the Finance Committee of the Legislative Yuan to discuss the planning of digital currency issuance and related issues of digital transformation.

Yang Chin-long emphasizes that digital currency promotion is not an international competition

Yang Chin-long pointed out that the promotion of digital currency is not an international competition. Although some countries have issued or piloted CBDCs, the development progress is not as expected. The central bank's experimental plan for digital New Taiwan Dollar is also underway, which will apply tokenization technology to support the tokenization development of various assets.

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Three scenarios of digital New Taiwan Dollar experiments

The central bank will conduct experiments in three scenarios to verify the feasibility of the digital New Taiwan Dollar:

Interbank transfer of deposit tokens

Banks can use tokenized shared platforms to convert deposits into deposit tokens according to customer needs for interbank transfers and use wholesale CBDC as clearing assets.

Synchronous delivery of asset token and security token

Using Security Token Offering (STO) issued by financial institutions as the subject, synchronous delivery of asset tokens and deposit tokens is carried out, and clearing is done through wholesale CBDC.

Special Purpose Digital Money

Government bidding units currently collect bid deposits from bidding companies using paper and manual operations. In the future, if special purpose digital money is used for processing, it can not only improve operational efficiency but also automate processes through smart contracts, further enhancing convenience and security.

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The central bank continues to improve the payment system, with no plans for issuing digital New Taiwan Dollar at present

Yang Chin-long stated that although there is currently no timetable for the central bank to issue CBDC, during the continuous research and experimentation process, efforts have been made to enhance the efficiency and innovative applications of the payment system. For example, the developed retail payment CBDC prototype platform can support the cash flow operations of digital coupons, and the number of transactions processed per second (TPS) has been increased to 20,000.

Concept verification of wholesale CBDC

The central bank is planning the concept verification of wholesale CBDC, using wholesale CBDC as clearing assets for asset tokenization and combining the functions of bank deposit tokens to jointly construct the future digital currency system.

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