HashKey and Kaia Partner to Accelerate Web3 Adoption in Asia
HashKey Group's Web3 adoption and collaboration aligns with the Kaia-Finschia merger and the launch of Kaia's new mainnet.
Pragmatic Development: Taiwan’s approach emphasises a sensible and cautious development process for CBDC. Rather than rushing into implementation, they prioritise thorough research, testing, and stakeholder consultation. This patience ensures that their CBDC design is robust and effectively addresses potential risks.
Focus on Financial Inclusion: Taiwan is keen on leveraging CBDC to enhance financial inclusion. By exploring how digital currencies can reach underserved populations and improve access to financial services, Taiwan aims to use CBDC as a tool for broader economic empowerment.
International Collaboration: Taiwan recognises the importance of international collaboration in CBDC development. Despite geopolitical challenges, Taiwan seeks to engage with global partners, share insights, and contribute internationally to the evolving understanding of digital currencies.
In recent years, the concept of Central Bank Digital Currencies (CBDCs) has captured the attention of governments and financial institutions worldwide.
Taiwan, known for its robust technology sector and forward-thinking policies, has been carefully evaluating the potential of CBDCs. Recently, the Taiwan Central Bank made it clear that while exploring this digital frontier, there is no rush to launch a CBDC. On July 7 2024, a news report by UDN announced that the President of the Central Bank of the Republic of China, Yang Chin-long, mentioned that being the first to introduce a CBDC does not guarantee success, as countries that have already issued or tested CBDCs have not seen the desired outcomes.
The central bank’s cautious approach stems from a desire to thoroughly study the implications and ensure that any digital currency aligns with Taiwan’s economic goals and regulatory framework. This stance contrasts with other countries that have embarked on more accelerated timelines for CBDC implementation. Taiwan’s deliberate pace reflects a commitment to prudent financial management and a desire to avoid pitfalls associated with hasty technological adoption.
Several key factors contribute to Taiwan’s measured approach to CBDCs. Firstly, the central bank emphasises the need for comprehensive research and analysis. This includes evaluating the impact of a CBDC on monetary policy, financial stability, and the broader economy. By taking the time to gather data and insights, Taiwan aims to make informed decisions that minimise risks and maximise benefits. Secondly, Taiwan recognises the importance of international cooperation and standards.
The global nature of digital currencies requires harmonisation with international regulations and interoperability with other financial systems. Taiwan’s participation in global forums and collaborations ensures that any future CBDC aligns with international best practices and fosters seamless cross-border transactions. Furthermore, Taiwan values public trust and confidence in its financial systems. The central bank is attentive to potential cybersecurity threats and privacy concerns associated with digital currencies. Addressing these issues is crucial to gaining public acceptance and ensuring the smooth adoption of a CBDC should Taiwan decide to proceed.
While Taiwan remains cautious, there are potential benefits that a CBDC could offer. Enhanced efficiency in payments, reduced transaction costs, and greater financial inclusion are among the advantages that digital currencies could bring. On June 10 2024, Yang outlined the central bank’s plans for a digital New Taiwan dollar.
Yang said, “The central bank is conducting experiments in three scenarios to enhance domestic payment efficiency and innovation. Although there is no timetable for issuing a CBDC, efforts to improve the payment system’s processing efficiency and innovative applications are on-going.” Yang added, “One significant development is the CBDC prototype platform designed for retail payments. This platform can already support the cash flow operation of digital coupons, with transaction processing speeds reaching 20,000 transactions per second.” Moreover, there is an ongoing effort to develop a proof-of-concept for a wholesale CBDC in Taiwan.
This initiative integrates CBDC with Bank deposit tokens to establish a prospective digital currency framework. The goal is to create a liquidation asset that facilitates asset tokenisation. The Central Bank of Taiwan suggested that it intends to utilise tokenisation technology to digitally innovate wholesale central bank currency and commercial bank currency, enabling support for diverse asset tokens. In pursuit of these goals, Taiwan’s central bank is conducting a proof-of-concept and partnering with participating banks to establish a unified platform for tokenisation. Taiwan’s tech-savvy population and advanced digital infrastructure position it well to leverage these benefits. The report suggested that this platform will be tested in three scenarios: inter-bank transfer of bank deposit tokens, simultaneous delivery of asset tokens and special-purpose digital money. However, challenges also loom on the horizon. Technical complexities, regulatory considerations, and the need for robust cybersecurity measures are paramount. The central bank acknowledges these challenges and underscores the importance of addressing them methodically.
the global landscape of CBDCs continues to evolve rapidly. Taiwan is closely monitoring developments in other jurisdictions and learning from their experiences. This adaptive approach allows Taiwan to refine its strategies and policies in response to emerging trends and lessons learned elsewhere. Yang reaffirmed that Taiwan’s careful approach to launching a CBDC aims to fulfil public digital payment requirements and align with governmental digital policy objectives, ensuring significant advantages. In March 2024, The Financial Supervisory Commission announced that it would propose a new draft of digital asset regulations for Taiwan in September 2024. The draft suggested that it plans to create more effective regulations for digital asset markets and assure investors’ safety.
Taiwan’s stance on CBDCs exemplifies a balanced approach between innovation and prudence. By prioritising thorough research, international cooperation, and careful consideration of benefits and risks, Taiwan aims to ensure that any future CBDC initiative contributes positively to its economy and financial ecosystem. While there is no rush to launch a CBDC, Taiwan remains actively engaged in shaping the digital future of finance, mindful of both opportunities and challenges.
HashKey Group's Web3 adoption and collaboration aligns with the Kaia-Finschia merger and the launch of Kaia's new mainnet.
BlackRock's Bitcoin ETF experienced its second-ever day of outflows as Bitcoin's price fell below $59,000.
AI-related tokens declined as Nvidia's Q2 earnings exceeded Wall Street estimates but didn't meet investor expectations.
Options enable institutional investors to manage risks and give traders the ability to increase their buying power.