Recent Central Bank Digital Currency Developments In Asia And Their Implications

This publication analyzes the evolution of Central Bank Digital Currencies (CBDC) in Asia and the Pacific, assesses their potential risks and technical challenges, and explores their potential to improve cross-border payments and financial inclusion. Ahead of the launch of any large-scale Asian CBDC, it details various models and explores how Cambodia, the People’s Republic of China, Singapore, and Thailand are taking the lead. Outlining global developments and emerging trends, it shows why a robust digital infrastructure, strong public-private collaboration, and fintech literacy are central to ensuring CBDCs help drive the transition to a digital economy.

This book provides a thorough introduction and historical overview of the principles and practices of digital currency and fintech in Asia. It covers the theory of central bank digital currency and examines regulatory aspects, economic digitalization, financial inclusion, and the role of SMEs. Selected case studies offer in-depth insights into recent fintech developments in major economies, including Australia; Hong Kong, China; Indonesia; Japan; the People's Republic of China; the Republic of Korea; and Thailand. The book also makes a valuable supplement for introductory courses on finance, governance, and economics, as it appeals to a broad range of readers, including university students, academics, finance practitioners, and policy makers.

Drawing on survey responses from 34 Asian economies and country case studies, this note takes stock of recent developments related to central bank digital currencies (CBDCs) and crypto assets in Asia. The survey finds that there is significant heterogeneity in terms of stage of development, but the emergence of private crypto assets has created an impetus to consider CBDCs. While most countries are engaged in research and development, with some at advanced stages of testing and pilots, very few countries are likely to issue CBDCs in the near-to-medium term, reflecting the still considerable uncertainties. Still, country experiences so far provide some key insights for others in their journey in this area.

Asia and the Pacific continues to experience rapid development of innovative technology solutions driven by increased government support to help address the economic fallout of the coronavirus disease pandemic. This publication identifies the role that central bank digital currencies could play in overcoming some of the challenges of achieving financial inclusion. It proposes recommendations to aid policy makers and regulators. The publication shares insights from the Asia–Pacific Financial Inclusion Forum, a policy initiative of the Asia–Pacific Economic Cooperation Finance Ministers’ Process.

This paper marks the launch of a new IMF series, Fintech Notes. Building on years of IMF staff work, it will explore pressing topics in the digital economy and be issued periodically. The series will carry work by IMF staff and will seek to provide insight into the intersection of technology and the global economy. The Rise of Digital Money analyses how technology companies are stepping up competition to large banks and credit card companies. Digital forms of money are increasingly in the wallets of consumers as well as in the minds of policymakers. Cash and bank deposits are battling with so-called e-money, electronically stored monetary value denominated in, and pegged to, a currency like the euro or the dollar. This paper identifies the benefits and risks and highlights regulatory issues that are likely to emerge with a broader adoption of stablecoins. The paper also highlights the risks associated with e-money: potential creation of new monopolies; threats to weaker currencies; concerns about consumer protection and financial stability; and the risk of fostering illegal activities, among others.

Growing Central Bank Challenges in the World and Japan offers insights for central banks looking to tackle the most pressing challenges under the global spotlight, starting with low inflation and its related impacts on unconventional monetary policy and policy coordination, including fiscal stimulus. It also provides important insights into issues related to central bank money, private money, the emergence of crypto assets, and the prospect of central bank digital currency. Part I focuses on examining the persistently low inflation in advanced economies and reviews various unconventional monetary easing tools. It summarizes recent discussions on new monetary policy frameworks that could become alternatives to existing flexible inflation targeting, such as average inflation targeting and price-level targeting, as well as policy coordination, including helicopter money and modern monetary theory. Part II sheds light on issues related to money, crypto assets, and central bank digital currency in advanced and emerging economies. It highlights the global rise in cash in circulation and gives an overview of the recent movements in private money, including bank deposits and e-money payment tools. It also examines the latest developments in crypto assets, including various types of “stablecoins” and Facebook’s Libra, reviews central bank digital currency proposals, and discusses the recent views expressed by regulatory authorities while incorporating new perspectives based on the coronavirus disease (COVID-19) outbreak.

Welcome to Central Bank Digital Currency: The New Money Explained, where digital currencies are poised to revolutionize the way we conceive, transact, and interact with money. In this book, we embark on an exploration of Central Bank Digital Currencies (CBDCs) - a groundbreaking innovation that promises to reshape the global financial landscape. Imagine a world where financial transactions are seamless, secure, and accessible to all. Where individuals have the power to manage their finances with ease, regardless of their background or location. Where governments and central banks have the tools to foster economic stability, drive innovation, and promote financial inclusion. This is the vision of CBDCs - a vision that holds the potential to unlock new opportunities for individuals, businesses, and economies worldwide. But to understand the promise of CBDCs, we must first delve into their origins, evolution, and potential impact on society, economy, and technology. In this book, we will journey through the history of money, tracing its evolution from primitive forms of exchange to the digital currencies of today. We will explore the factors that have led to the rise of CBDCs, from technological advancements to shifting consumer preferences and regulatory developments. But our exploration does not stop there. We will also examine the current state of CBDC implementation around the world, highlighting the progress made by different countries and the challenges they face in realizing the full potential of CBDCs. Moreover, we will delve into the myriad opportunities and challenges presented by CBDCs - from financial inclusion and economic stability to privacy concerns and cybersecurity risks. We will explore the technological innovations that underpin CBDCs, such as blockchain, digital identity solutions, and smart contracts, and their implications for the future of finance. As we journey through the pages of this book, we will encounter stories of innovation, collaboration, and transformation. We will meet visionaries who are shaping the future of finance and explore the ethical, legal, and regulatory considerations that accompany the adoption of CBDCs. Ultimately, this book is an invitation to explore the potential of CBDCs - to imagine a future where digital currencies empower individuals, drive economic growth, and foster social progress. It is a call to action for governments, central banks, financial institutions, and technology providers to embrace innovation, uphold ethical values, and work towards a more inclusive and sustainable financial future. So join us on this journey into the future of finance. Let us embark together on a voyage of discovery, enlightenment, and possibility. Together, we can shape a world where CBDCs revolutionize the way we think about money and create a future where financial opportunity knows no bounds.

Growing Central Bank Challenges in the World and Japan offers insights for central banks looking to tackle the most pressing challenges under the global spotlight, starting with low inflation and its related impacts on unconventional monetary policy and policy coordination, including fiscal stimulus. It also provides important insights into issues related to central bank money, private money, the emergence of crypto assets, and the prospect of central bank digital currency. Part I focuses on examining the persistently low inflation in advanced economies and reviews various unconventional monetary easing tools. It summarizes recent discussions on new monetary policy frameworks that could become alternatives to existing flexible inflation targeting, such as average inflation targeting and price-level targeting, as well as policy coordination, including helicopter money and modern monetary theory. Part II sheds light on issues related to money, crypto assets, and central bank digital currency in advanced and emerging economies. It highlights the global rise in cash in circulation and gives an overview of the recent movements in private money, including bank deposits and e-money payment tools. It also examines the latest developments in crypto assets, including various types of "stablecoins" and Facebook's Libra, reviews central bank digital currency proposals, and discusses the recent views expressed by regulatory authorities while incorporating new perspectives based on the coronavirus disease (COVID-19) outbreak.