Taiwan is not in a CBDC rush as central bank lacks timetable 

Taiwan’s central bank digital currency (CBDC) is nowhere close to being launched.

The country’s apex financial institution recently stressed that it lacks a specific timetable for introducing a digital currency, emphasizing the complexity involved.

However, plans are not entirely off the table. The bank plans to conduct extensive research via public hearings and discussions throughout the year to inform the public about the prospective digital currency.

This announcement coincides with a global trend where an increasing number of countries, representing 98% of the global economy, are either investigating or advancing their own digital currencies.

However, various nations have voiced concerns regarding the potential implications of increased governmental surveillance linked to digital currencies.

Taiwan’s central bank is proceeding cautiously and methodically toward the potential introduction of a CBDC, prioritizing public awareness and education as essential precursors to any future launch.

CBDCs: Trends and risks

CBDCs are increasingly gaining global attention, with numerous countries exploring or advancing their digital currency initiatives.

Three countries—the Bahamas, Jamaica, and Nigeria—have fully launched their CBDCs. An additional 53 countries are in advanced planning stages, while 46 others are actively researching the concept.

The motivations behind adopting CBDCs vary widely by country, often centered on goals such as enhancing financial inclusion, improving payment efficiency, and offering a sovereign digital currency option.

In regions like the Middle East and Central Asia, 19 out of 31 countries are exploring CBDCs, driven by objectives such as boosting cross-border payment efficiency, particularly among oil exporters and Gulf Cooperation Council nations like Bahrain, Saudi Arabia, and the UAE.

However, adopting CBDCs necessitates careful deliberation due to potential risks such as bank runs, susceptibility to cyber threats, and complex regulatory challenges involving privacy and anti-money laundering measures.

Policymakers have weighed these risks against the anticipated benefits to determine the suitability of a CBDC for their respective economies.

Noteworthy CBDC projects include Kazakhstan’s digital tenge, which has undergone two pilot programs, and the EU’s development of a legal framework for the digital euro.

Cross-border CBDC initiatives like mBridge, involving central banks from China, Thailand, Hong Kong, and the UAE, are also progressing through pilot phases.

Despite the momentum in CBDC adoption, existing digital payment solutions already fulfill some intended benefits.

Concerns persist regarding data privacy, security, and the uncertain adoption rates of CBDCs. Ultimately, the evolution of monetary systems will hinge on how central banks navigate the intricate landscape of CBDC implementation in the years ahead.

Source link

About The Author

Scroll to Top