Asia’s central banks are ahead in the race to develop their own digital currencies, say experts, led by China, Hong Kong, Thailand
- China is expected to be among the world’s first few central banks to roll out a sovereign digital currency to join the US$25.9 trillion e-payment market currently dominated by Alipay, WeChat Pay
- Collaboration between Hong Kong and Thailand is expected to help companies save costs incurred in cross-border payments
Asia is a step ahead of other regions in developing central-bank digital currencies, with China, Hong Kong and Thailand set to roll out sovereign virtual tokens as a means of payment and to better monitor money flows.
One thing these central banks have in common is that they are all planning to partner with commercial banks in rolling out their digital tokens. But China will for now limit their use to domestic retail payments, unlike Hong Kong and Thailand, which are exploring their use for cross-border payments in bilateral trade.
Given its retail focus, China’s central bank, the People’s Bank of China, is keen to differentiate its digital currency from cryptocurrencies.
Mu Changchun, deputy director of the PBOC’s payment and settlement department, said its “digital currency electronic payment” project involves digital yuan intended solely for the payment of goods and services. It should not be confused with cryptocurrencies, the trading of which authorities have clamped down on.
“It is different to bitcoin or stable tokens, which can be used for speculation or require the support of a basket of currencies,” Mu was quoted by the Shanghai Securities News earlier this month as saying.
The PBOC’s ultimate goal is to replace cash – notes and coins changing hands anonymously – with its digital yuan.