Blockchain Central Bank Digital Currency (CBDC) in Asia: Where We’re Headed

In Blog, Enterprise by Darpan Keswani

Central bank digital currencies (CBDCs) are growing at an unprecedented pace around the world. Dozens of countries are now interested in utilizing blockchain technology for interbank settlements and day-to-day financial operations. A recent survey revealed that 70% of central banks are currently exploring the use of CBDCs, with the majority in the proof of concept phase. As the most populous continent on Earth, Asia stands to benefit from this technological revolution disproportionately.

There is a firm distinction between the two ways in which central banks interface with digital currency. A wholesale CBDC is explicitly for institutional use between participating banks and institutions. The general public cannot access wholesale CBDC, and the underlying blockchain is relegated to bank use only.

Source: Atlantic Council

Retail CBDCs refer to a publicly available digital currency issued by a central bank. There are currently only a handful of countries in the world that are actively developing retail CBDCs, including China, Sweden, Uruguay, and the Bahamas. Out of the 36 central banks that have published works on CBDCs, 18 are specifically interested in retail applications. Sweden’s e-krona is the most developed and formalized of all existing retail CBDCs, with the use of cash having been on the decline for almost a decade in the country. The nation’s central bank, Riksbank, announced in February 2020 that it will be partnering with services firm Accenture to develop a technical solution for mass consumer adoption.

The diverse countries of Asia are at various stages of CBDC development. For example, Project Inthanon-LionRock was a cooperation between Hong Kong and Thailand that operated on Corda’s R3 platform. Recently, however, the Thai central bank has confirmed that it will use enterprise Ethereum for a retail CBDC prototype. While this is a new avenue of exploration, full expansion to general retailers will not be implemented until the fourth stage of the project.


Neighboring Vietnam is also interested in blockchain technology applications but is approaching the tech stack in a slightly different way. Rather than constructing a formal CBDC, the Vietnamese government has launched a blockchain project called akaChain to serve as a digital ID platform. The National Bank of Cambodia has also launched the Bakong blockchain payment system. Across the South China Sea, the Indonesian and Philippine central banks have both been opining about blockchain’s role for their diverse populations. Indonesia hopes to have a whitepaper released by the end of 2020 while the Philippine central bank has announced a feasibility study.

The city-state of Singapore has long been a paragon for technological innovation. With the project now complete, the nation’s multi-currency payment platform, the Monetary Authority of Singapore (MAS), is preparing to launch their own CBDC. In the East Asian sphere of influence, South Korea embraces its status as an emerging technological hub. The central bank has initiated a pilot program that will run until the end of 2021.

Source: Bank for International Settlements as found on

China stands alone globally as the only nation that is actively implementing both a wholesale and retail CBDC. Referred to as the Digital Currency Electronic Payment (DCEP), there remain many unknowns about the development, implementation, and time frames with which the Chinese government works. China launched a trial run of its CBDC in May across four major cities: Shenzhen, Suzhou, Chengdu, and Xiong’an.

Ridesharing giant Didi has also announced the implementation of the nation’s hybrid CBDC. With over 550 million users, Didi is known as “China’s Uber” and will expose over half a billion Chinese citizens to the concept of a seamless CBDC. The People’s Bank of China plans to hand out over 10 million digital Yuan in the form of “red envelope” gifts to citizens in the Shenzhen district, highlighting the country’s firm commitment to rolling out a true retail CBDC.

As the world’s most populous continent, Asia is a diverse and influential region. While each nation is approaching CBDCs differently, there is a clear exploration of innovative underlying technologies. The IMF recently announced a move towards a new Bretton Woods style agreement. CBDCs will undoubtedly play a significant role in the increasing global interconnectivity of modern finance.

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