Taiwan to Debut Retail CBDC by September

Taiwan, CBDC

Taiwan is moving straight ahead on the introduction of retail central bank digital currency (CBDC), LedgerInsights.com reported.

The island nation expects to complete trials of its prototype CBDC this fall.

Its most recent design is a two-tier system, allowing consumers to exchange bank deposits with the digital currency. The CBDC will also be linked to credit and debit cards and will be legal tender. As of now, there are no age restrictions.

“In the whole financial system there are multiple channels, and we don’t want a single channel because it will be troublesome if there is a problem with that one channel,” said Huang Nanzhou, chairman of Yushan Bank. “So multiple channels must coexist. That’s what the central bank will think as well. I assume that one day, when digital currency comes out, (other) electronic payment services will still exist.”

While the drivers for CBDC in China stem from the dramatic decline in cash usage and worries about private monopolies controlling the retail payment system, it’s a different story in Taiwan, where there is plenty of cash.

Taiwan has said it’s more closely aligned with the United States, Europe, Japan and South Korea. As a result, it prefers to ensure that a CBDC can offer benefits over other forms of ePayments.

Last week, European Union Commissioner for Financial Services Mairead McGuinness announced plans to introduce a bill creating a digital euro next year.

See also: EU Says Stablecoin Bill Coming in March

Based on current experiments, that means an EU CBDC could launch as soon as 2025. The EU has been largely bullish on a CBDC for several years. Notably, European Central Bank (ECB) President Christine Lagarde  announced on Twitter in July that the bank had “decided to move up a gear and start the investigation phase of the digital euro project.”