Central Bank President Yang Jinlong CBDC is not an international competition analyzing three scenarios for the application of digital NT with no issuance expectations yet

Central Bank Governor Yang Chin-long detailed the development plan for digital NT in a public speech yesterday (5/7), emphasizing that the promotion of central bank digital currency (CBDC) is not a competition among countries. Yang will deliver a special report on the planning of CBDC issuance and digital transformation-related issues at the Legislative Yuan’s Finance Committee today.

Table of Contents:
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Yang emphasizes that the promotion of digital currency is not an international competition
Three scenarios for testing digital NT
Interbank transfer of bank deposit tokens
Simultaneous delivery of securities tokens and bank deposit tokens
Special Purpose Digital Money
Central bank continues to improve payment systems, no current plan for digital NT issuance
Concept verification for wholesale CBDC
Yang pointed out that the promotion of digital currency is not an international competition. Even though some countries have already issued or piloted CBDC, their development progress is not as expected. The central bank is currently conducting trials of digital NT and will utilize tokenization technology to support the tokenization development of various assets.

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The central bank will conduct tests in three scenarios to verify the feasibility of digital NT:
Banks can convert deposits into deposit tokens according to customer needs using a tokenized shared platform, and perform interbank transfers using wholesale CBDC as the settlement asset.
Using securities tokens issued by financial institutions as the target, conduct simultaneous delivery of securities and deposit tokens, and settle through wholesale CBDC.
The government’s bidding units currently collect bid deposits from bidders in paper form and through manual operations. If a special purpose digital money approach is used in the future, it can not only improve operational efficiency but also enhance convenience and security through the automation of processes using smart contracts.

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Yang stated that although the central bank currently does not have a timetable for issuing CBDC, it has been improving the efficiency and innovative applications of payment systems through continuous research and testing. For example, the developed prototype platform for retail payment CBDC can already support the flow of digital vouchers, and the transactions per second (TPS) has increased to 20,000.
The central bank is planning a concept verification for wholesale CBDC, using wholesale CBDC as a settlement asset for the tokenization of assets, and combining the functions of bank deposit tokens to jointly construct the future digital currency system.

(Taiwan Central Bank’s Digital Currency Progress Summary: What are the Benefits and Risks of CBDC? What is the Progress of the Trials?)
Taiwan
Central Bank
Yang Chin-long


Further reading:
Taiwanese People Have Too Much Idle Money! Central Bank Proposes Three Solutions for Excess Savings, Can’t they Invest in Bitcoin ETFs?
Central Bank Governor Yang Chin-long Reports on CBDC Trial Progress: System Completed Ahead of Schedule, Bank Deposits Can be Exchanged, Migrant Workers Can Make Small Cross-Border Remittances