Increased adoption and access to CBDCs is the next step for central banks to push greater use of digital payments. This is an opportunity which countries in Asia Pacific are looking to tap by establishing the necessary governance frameworks.
July 13, 2021 | Amit Ghosh- Central banks in Asia Pacific are ahead of US and UK in digital currency implementation
- Central banks explore new technologies arising from challenges posed by private sector initiatives such as Facebook’s Diem
- Blockchain plays a crucial role in tokenisation
Businesses worldwide have adapted to remote working as a result of pandemic-induced national lockdowns. One noticeable consequence of this new style of working has been a shift towards the digital world. As many industries experience this digital shift, central banks have began to follow suit through the development of central bank digital currencies (CBDCs). However, not all digital currencies are created equal and it is already clear which countries are leading the charge.
Asia Pacific leads the way towards CBDCs
Asia Pacific (APAC) countries are leading by example when it comes to embracing new technology. These countries have drawn global attention due to their innovative applications of cutting-edge technology. APAC’s success with CBDCs is a prime example. Countries which have historically been at the forefront of currency developments, such as the US and the UK are no longer leading the charge. Desire to protect long-standing currencies has led to a ‘regulation first’ not ‘innovation first’ approach for many.
The US Fed, the Bank of England, the Bank of Japan and the European Central Bank are all currently exploring the technology. Meanwhile, the Bank for International Settlements (BIS), the so-called “central banks’ central bank” has been discussing CBDCs at length.
Central banks explore new technologies arising from challenges posed by private sector initiatives
So why are central banks, the heart of the economic establishment, so interested in technology with such radical and revolutionary roots?
In part, they are responding ...
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Keywords:Digital, Currencies, CBDC, Technology, Blockchain, Project Dunbar, Project Inthanon, Dvp, Pvp, Facebook, Tokenization, Stablecoins
