Central bank digital currency activity is accelerating in Asia, where a range of digital payments and financial infrastructure projects are moving from desktop study to beta test implementation. This edition of the DMI Journal takes the region as its inspiration with accounts of digital projects from both private and public sectors, stretching from China to Manila via Bangkok and Singapore. We also highlight a pair of projects from Europe.
Much attention is fixed on the People’s Bank of China’s test in four cities of its retail CBDC, a digital fiat currency distributed on the mobile phone platforms of two leading social messaging services. This adds much greater functionality to both private sector offerings, as well as potentially displacing cash for the majority of retail transactions. The PBoC is at pains to stress that its Digital Currency Electronic Payment is not designed as a substitute for cash. The digital cash circulating is fully collateralised, and the authorities have partial view over users and transactions. While the precise features of this model may not be attractive to other central banks, the experiment will be studied with great interest worldwide.