Home Taiwan Advances CBDC Development, unveils prototype

Taiwan Advances CBDC Development, unveils prototype

tl;dr

  • Taiwan's central bank revealed a prototype CBDC platform and plans further research and hearings in 2024.
  • The platform supports 20,000 transactions per second, offering both anonymous and registered wallets.
  • Since 2019, Taiwan's cautious CBDC research remains distinct from unregulated cryptocurrencies and stablecoins.

Taiwan’s central bank has made significant strides in its central bank digital currency (CBDC) research, revealing a prototype platform.

According to a recent report by a local news outlet, the central bank’s plans to conduct multiple hearings and forums in the coming year to further its CBDC study and development. Central Bank Governor Chin-Long Yang emphasized in a recent research report that developing a digital currency is not a race among nations.

The bank has not set a definitive timeline for CBDC issuance, according to the Central News Agency. Yang is set to present the CBDC development progress report to Taiwan’s parliament, the Legislative Yuan, on Wednesday.

The prototype platform features a two-tier issuance structure and will initially offer a non-interest bearing currency. It will support both anonymous and registered wallet options.

On the retail front, the platform has demonstrated a processing capacity of 20,000 transactions per second. The central bank also plans to develop a wholesale CBDC, which could serve as a clearing asset for tokenized assets.

Taiwan’s interest in CBDC is not new

Taiwan initiated its CBDC research in 2019 and has completed two testing phases. The central bank maintains a cautious approach toward potential CBDC issuance. Notably, the bank distinguishes its CBDC research from cryptocurrencies and stablecoins, which remain largely unregulated in Taiwan. However, crypto service providers must comply with anti-money laundering (AML) laws.

Recent developments in Taiwan’s crypto landscape include the formation of an industry association to create self-supervisory rules and proposed amendments to AML laws. These amendments would require crypto firms to register for compliance, with potential penalties including imprisonment for non-compliance.

Following in The Bahamas’ footsteps

The Bahamas, a pioneer in launching a central bank digital currency (CBDC) called the Sand Dollar, is now developing regulations to boost its adoption. As ReadWrite recently reported, the Caribbean nation plans to mandate commercial banks to offer access to this digital currency, aiming to expand its reach. Despite being launched in 2020, the Sand Dollar has seen limited uptake so far.

Recent data shows some growth, with the currency’s circulation volume increasing by 60.8% to $1.7 million by the end of 2023, and personal wallets growing by 20% to reach 118,955. The Sand Dollar’s development began in the late 1990s as part of efforts to modernize the country’s payment systems, with a pilot program launched in 2019 and a nationwide rollout in October 2020.

Featured Image: Pixabay

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The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Radek Zielinski
Tech Journalist

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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