Central bank digital currencies (CBDC) were the talk of the industry in early 2020 after China’s state bank, the People’s Bank of China released its digital currency electronic payment (DCEP). 

But what are central bank digital currencies? Here is our guide on what the currency is and the outlook for the different central banks in the Asian continent. 

What is a Central bank digital currency (CBDC)? 

Put simply, CBDCs are essentially digital currencies issued by a central bank of a nation and are to be used by consumers, banks, and companies, similar to that of traditional methods of payment. 

CBDC’s are usually built with two scenarios in mind. The first is consumer-driven and is referred to as a general-purpose CBDC, suitable for the public and consumers. On the other hand, wholesale CBDCs are designed for bigger settlements, usually, banks and other financial institutions would use it. 

They can be built upon various networks. The most common would be blockchain, the technology behind the majority of cryptocurrencies, but can also be done using other technologies like distributed ledger technology (DLT). What is chosen often depends on the bank, China has opted to not use blockchain in their DCEP. 

Who created the idea of CBDCs?

Since the advent of Bitcoin (BTC), the possibility of state-backed cryptocurrencies must have been contemplated as a possibility. However, it took until 2016 before official research papers, like Warren Weber’s report for the Bank of Canada, started to talk about a central bank digital currency, possibly backed by Bitcoin. 

Pros and Cons


  • Bring Banking to more people: The fact that customers don’t need to have bank accounts to hold digital currencies means banking can be at the hands of millions who are unbanked. Cash is also unhygienic and costly to move.
  • Cost-Effectiveness: CBDCs don’t have long processing times and costly fees. Sending and receiving cryptocurrencies can be done quickly and easily, with just a phone and internet connection required. 
  • Resilience to political changes: When analyzing stable coins, which are similar to CBDC’s, you can see that they do not swing as greatly as some traditional currencies. They also provide a safety net for banks should they collapse, as they will have a digital system.
  • Anti Money Laundering: Cash is hard to trace, but with digital currencies banks can track easily the transfer of funds, making anti-money laundering activities much easier. 


  • Hacks and cyberattacks: A daunting prospect is the very real possibility of a major cyberattack, which could see large amounts of funds go. 
  • Deposit rates increase: Banks could raise deposit rates to increase their money income for customers looking to deposit in CBDCs. This could lead to a bad cycle of banks then causing higher interest rates and less bank credit. 

Countries Researching CBDCs

According to the Bank for International Settlements (BIS) research, around 80% of the world’s banks are actively engaging in research into a digital currency. Major world financial institutions are also backing research, including the International Monetary Fund (IMF). There is also a global CBDC research group. 

In terms of digital currencies already released, Venezuela has had the most famous reveal of a digital currency, with its Petro token making headlines. Africa has seen two countries release their own digital currencies- Senegal and Tunisia. In Europe, the EU, France, Sweden, and Switzerland are conducting research. Others, like Germany, have announced no plans for a CBDC. Asia, a continent often leading crypto adoption, has seen numerous nations release their own CBDC, others are slower to start. Here is a breakdown of the main nations:

Asian Countries CBDC Table

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CountryState of CBDC
ChinaDCEP in the trial stage across 4 cities.
JapanJoint research with the EU, Canada, Sweden, and more. Expected soon. 
IranReleased Peyman in January 2019.
IraqHas no plans for a CBDC.
North KoreaResearching their own CBDC, meetings held with Ethereum foundation employee Virgil Griffith has arrested after doing a talk about CBDCs in Pyongyang. 
South KoreaBank of Korea has announced research plans.
IndiaRumoured Digital Rupee plans.
PakistanCBDC planned for before 2030. Alipay has cross border digital currency payment platform to Malaysia.
CambodiaNational Bank of Cambodia has announced research is almost finished on a digital currency called Project Bakong.
ThailandBank of Thailand has begun research for a Project Inthanon. Said to be a wholesale CBDC.
SingaporeBegun research on Project Ubin which looks at technologies behind CBDCs.
The PhilippinesShares digital currency for cross border payments with Singapore. 
Saudi Arabia/UAEBoth countries have CBDC plans and have partnered on a digital currency called Aber for banking transfers between the nations.
TurkeyPilot CBDC called Lira due by the end of 2020.
Israel/PalestineBoth countries are looking into their own CBDCs.
KazakhstanActively researching CBDCs, and are formulating trials.