The central bank would press ahead with study and development of a healthy ecosystem for its own digital currency to meet modern needs, but would not get into a race to achieve it, central bank Governor Yang Chin-long (楊金龍) said yesterday.
Taiwan has completed a phase 2 study on a digital currency three months ahead of schedule, building a prototype platform to simulate use of a digital currency in retail payment systems, Yang said in a keynote speech at an event organized by the Financial Information Service Co (財金資訊), which oversees Taiwan’s banking payment and settlement systems.
CTBC Bank (中信銀行), Cathay United Bank (國泰世華銀行), Hua Nan Commercial Bank (華南銀行), Taishin International Bank (台新銀行) and Shanghai Commercial and Savings Bank (上海商業儲蓄銀行) were part of the study, he said.
Photo: CNA
The central bank is to gather feedback, refine technologies and seek support from users, financial institutes and experts based on the study’s results, he said.
The communication stage would require a lot of time given the delicate, complex and tedious nature of the matter, Yang said.
The monetary policymaker is to formulate a sound and resilient regulatory system for the use of a digital currency, he said, adding that most global central banks favor a no-interest approach.
The central bank does not have a timetable for issuing a digital currency, as its focus is on making sure the infrastructure and regulatory framework are well prepared, Yang said.
Taiwan is not behind in the development of a central bank digital currency compared with other nations, Yang said, adding that countries such as China and Sweden have not yet set a rollout date, despite being in the middle of trial runs.
There are more than 20,000 cryptocurrencies and derivative products in existence, with almost all of them intended as investment tools, Yang said, adding that their values have swung wildly in the past few years.
The combined value of every cryptocurrency wallet was US$3 trillion in November last year, but plunged to US$900 billion following global monetary tightening, he said.
Bitcoin remains the most popular, with 41 percent of the market, he said.
Yang urged investors to stay away from such cryptocurrencies, as they are not backed by central banks, even though they seek to become conventional financial assets.
Their drastic price corrections might not pose a threat to the stability of global financial systems in light of their small scale, as conventional financial assets are worth US$469 trillion, he said.
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