Taiwan’s CBDC is partnering with the Depository and Clearing Corporation to move toward innovative RWA applications

With the rapid development of tokenized assets and blockchain technology worldwide, wholesale CBDCs have become a key financial infrastructure that central banks in each country are planning. In promoting wholesale CBDCs, Taiwan’s central bank is actively carrying out pilot-experiment cooperation with the Taiwan Depository and Clearing Corporation (TDCC), aiming to address future issues of the efficiency and security of digital-asset settlement, and to pave the way for RWA in the future.

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The positioning of wholesale CBDCs and their ultimate settlement function

Taiwan’s central bank strictly positions wholesale CBDC as “tokenized central bank reserves.” Its core function is to serve as settlement assets among financial institutions. Unlike retail-type CBDCs for everyday use by the general public, wholesale CBDCs focus on processing the settlement of the transfer of deposit tokens between banks or other tokenized assets. In the future tokenized financial ecosystem, it will play the role of a cross-platform, cross-institution settlement tool, ensuring that when financial institutions conduct digital-asset transactions, they can use central bank money with no credit risk as the ultimate basis of trust, thereby maintaining the stability of the overall financial system.

Pilot tokenized cash-flow and the TDCC settlement platform

To respond to the macro development trend of tokenizing real-world assets (RWA), the central bank, in coordination with the Financial Supervisory Commission and participating banks, has built a “tokenized cash-flow pilot platform,” and further carried out in-depth cooperation with the Taiwan Depository and Clearing Corporation (TDCC). Under this cooperation mechanism, the TDCC Center opens a master custody account within the central bank’s pilot platform to enable financial institutions to deposit wholesale CBDC. Then, the TDCC’s tokenized pilot platform will exchange the wholesale CBDC into “TDCC settlement tokens” at a 1:1 ratio, using these as the foundational medium for subsequent trading and settlement of various tokenized assets.

Implementing simultaneous settlement of cash and securities to improve market efficiency

Through the above cooperation framework with the TDCC Center, the practical objective of this central bank strategy is to achieve “Delivery versus Payment” (DvP) for simultaneous settlement of cash and securities. Using wholesale CBDC on the TDCC platform to support settlement allows the clearing of funds and the transfer of assets to be synchronized in the same instant, thereby effectively reducing counterparty default risk and time lag. This not only can significantly improve settlement efficiency in Taiwan’s domestic financial markets, but also lays out a concrete and feasible development path for Taiwan’s future exploration of building secure, efficient tokenized financial infrastructure.

This article, “Taiwan CBDC and TDCC settle in partnership to move toward innovative RWA applications,” first appeared on Chain News ABMedia.