According to Taiwan’s central bank head, crypto has become more of a commodity, as opposed to fulfilling its original role as a payments method.
Taiwan’s central bank governor has stated that the speculation in the crypto market has turned cryptocurrencies into a commodity and is distancing them from their original role, which was to serve as a method of payment.
Taiwan’s Apple Daily reported that Yang Chin-long, who assumed the role of central bank governor earlier this year, issued the comments while addressing lawmakers at a meeting on Thursday.
The bank head stated that there is a great deal of “uncertainty” surrounding the status of cryptocurrencies as a method of payment. Rather, excessive market speculation has made them extremely volatile, and rendered them unable to fulfil the original role intended for them – i.e. as a payments tool.
He also went on to add that the bank has been observing the trends in the crypto space, closely following crypto-related developments in other countries, and is “doing experimentation” in this regard; however, they currently do not have any plans to issue a digital version of the New Taiwan dollar.
Although cryptocurrencies have boomed in popularity, there is little to no adoption of crypto as a payment method. This is partly due to the speculative nature of the crypto space, where people prefer to ‘hodl’ rather than spend, and partly because of technical difficulties – e.g., while Bitcoin has gained popularity, the fees have not been feasible for micropayments, leading companies such as Steam to drop it as a method of payment.
While cryptocurrencies have been kept at arm’s length by most central banks and regulatory authorities around the world, blockchain technology has been eagerly embraced by many, including Taiwan. Earlier this year, during his inauguration speech after taking up his new role, Yang Chin-long stated that the bank planned to explore the possibility of a blockchain-powered payments system, to increase the efficiency of its operations.