The Race to Develop Central Bank Digital Currencies in Asia

Asia Blockchain Review
January 7, 2020

While regulators in other parts of the world are seeking the best way to issue legislation for blockchain and crypto-related assets, Asian economies, especially China, Hong Kong, and Thailand, are quickly developing their own central bank digital currencies (CBDCs) to be used as a means of payment.

China to Offer Digital Yuan for Domestic Retail Payments

According to the South China Morning Post, the People’s Bank of China (PBOC) — the nation’s central bank — has emphasized that its CBDC is not a form of cryptocurrency.

Mu Changchun, Deputy Director of the PBOC’s payment and settlement department, has revealed that the digital yuan is “different to Bitcoin or stable tokens, which can be used for speculation or require the support of a basket of currencies.” 

Meanwhile, Chinese authorities have disclosed that at this stage, the digital yuan can only be used for domestic retail payments, in contrast to Hong Kong and Thailand, whose central banks are seeking to use the CBDC for cross-border payments in order to facilitate overseas trade.

Hong Kong, Thailand Jointly Develop Digital Token Project

In November 2019, Edmond Lau, Senior Executive Director of the Hong Kong Monetary Authority (HKMA), disclosed that the regulator has been working on a central bank digital token project with the Bank of Thailand.

He added that the project relies on blockchain technology to carry out overseas payments for companies as well as financial institutions.

However, while China aims to use its CBDC for retail purposes, Hong Kong has a different vision for its digital currency.

“The prospect of issuing a central bank digital currency for retail purposes in Hong Kong is limited, as we have so many retail payment services [ranging from] credit cards and debit card to others,” said Lau.


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