Taiwan’s central bank has been working on a pilot CBDC for the past two years. The state-owned e-currency is set up to enable people to use a digital wallet and make payments without relying on other secondary instruments.
Central Bank Governor Yang Chin-long spoke at a forum on digital currencies, saying they had mimicked the use of the CBDC in a closed-loop testing environment. In particular, the connection operation with the bank’s official operating system has not yet been opened.
This means that there is still time for an official release of the CBDC to the public for retail use. The central bank intends to check three other blocks before that. First, the public will be educated and communicated with. After that, the stability of the system will be ensured. And then a proper legal framework will be drawn up for the currency’s operations.
Yang expressed a rough and uncertain time frame, saying,
“It will take a long time, at least two years, and then we will have to re-evaluate it.”
Yang also stressed the fact that the Taiwanese are still used to using cash. However, the same will change with time. He stressed why, he said,
“We still have to move forward. After all, most of the young people will use cellphones in the future, so we have to think about the next generation. ”
On Bitcoin and other assets
Bitcoin is currently down about 70% from its $ 69k November highs. According to the translated version of the keynote address, the governor felt that Bitcoin’s price action was “rollercoaster-like”. The same makes it more of a “speculative risky asset”, not eligible for payment.
In addition, he also ruled out the use of stablecoins as an alternative payment mode. Over the past few weeks, a handful of stable coins, ranging from Terra’s UST to Tether’s USDT, have lost their pen. Yang stressed that stable currencies “are mainly used to promote speculation and investment” and “are rarely used for payment or real economic activity.”