D I G I TA L C U R R E N C I E S THE FINTECH TIMES
The Asia CBDC Race
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Who’s trailblazing Asia’s development of central bank digital currencies? Tyler Smith, Junior Journalist at The Fintech Times, investigates
efined in its simplest and purest form, a central bank digital currency (CBDC) is a digital form of fiat or local currency. It’s an electronic token of a national ledger that can be issued for retail, wholesale, or international payments, and is regulated by a central banking body. And, although interest in this contemporary form of digital payment suffers no restrictions in terms of international interest, nowhere is the development of such more prominent than in the Asia Pacific (APAC) region.
CAMBODIA
Cambodia’s ‘Project Bakong’, launched in October 2020 in collaboration with Japan’s Hyperledger Iroha blockchain, stands as the only live example of retail CBDC in Asia. Unlike other similar initiatives, Project Bakong does not
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utilise digital native money. Instead, users can make payments through their own reserves of either riel or the US dollar. To achieve this, Cambodians can use either their own telephone numbers or a QR payment system to connect with digital wallets over the blockchain. As of January 2021, Project Bakong had successfully transacted more than $20million via 50,000 users and 20 banks.
CHINA
Despite the lack of a nationwide rollout, neighbouring China appears to be very much leading the way in the development and adoption of CBDCs. The People’s Bank of China (PBoC) heavily signalled its
arrival in the technological landscape, when in April 2021, it issued the e-CNY, or digital yuan; becoming the very first major economy in the world to do so. Although the e-CNY is issued by the PBoC, it’s distributed by the country’s leading commercial banks and payment platforms. For example, Alipay – which boasts an impressive collection of 1.3 billion users – added the e-CNY to its platform in May 2021; although the payment option is only currently available to a proportion of certain users as use of the currency continues through its pilot phase. The e-CNY pilot is currently
being trialled across four major cities in China – Shenzhen, Chengdu, Suzhou and Xiong’an. And despite these geographical limitations, the PBoC has reported that the e-CNY has successfully completed 70.75 million transactions as of September 2021, an achievement that has been spread across almost 21 million personal wallets and 3.5 million enterprise wallets.
JAPAN
Running a little bit behind its neighbours in the development of CBDCs is Japan. And, despite the lack of any official implementation, the Bank of Japan made a statement in April 2021 when it
