The Central Bank of the Republic of China (Taiwan) has completed a technical feasibility study for a wholesale central bank digital currency (wholesale CBDC) and has drawn up plans for further pilots of a retail or “universal” CBDC. That’s according to Deputy Governor Chu Mei-lie during a speech today.
Governor Yang made similar comments in June 2022. At that stage, following the second phase of the universal CBDC pilot, he said a key motivation was declining cash usage. The aim of CBDC was to provide public access to secure digital currency, meet the needs of future payment services, deepen financial inclusion, and improve cross-border payments.
However, in today’s speech, Deputy Governor Chu emphasized tokenization as the motivation. That’s particularly for the central bank to provide an anchor for tokenized deposits and stablecoins, and an additional payment option in a tokenized world. During her speech the Deputy Governor spoke about the BIS concept of a Unified Ledger, which aims to support tokenized securities, real world assets and tokenized deposits.
Regarding the universal CBDC, so far the central bank has demonstrated wallet opening, exchange, transfers, shopping and digital coupons. Last year’s trials involved five commercial banks. From a technical angle, the CBDC platform currently supports 20,000 transactions per second, sufficient to cover Taiwan’s 23 million population. However, it still wants to increase that figure further.
Additionally it is researching an offline CBDC solution.
The central bank plans to conduct surveys across the ecosystem and follow that with a communication campaign. Plus, it is liaising with the BIS and Swift.