CBDC Regulation in Asia-Pacific: A beginner’s guide
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CBDC Regulation in Asia-Pacific: A beginner’s guide

Regulations have paved the way for many emerging technologies, serving as a tool for government organizations to sift through disruptive implementations into the mainstream with caution. 

As a result of the tailor-made regulations in place, citizens of different countries get to experience different versions of censorship and access to technology and processes. The same holds true for the crypto ecosystem.

While governments have historically shown reluctance to adopt Bitcoin (BTC) or other cryptocurrencies as legal tender, central bank digital currencies (CBDCs) have recently gained attention as means for government organizations to digitize fiat currency while retaining the status quo of traditional finance. CBDCs are 1:1 digitized versions of fiat currency issued by a national central bank that aims to reduce transaction times and operating costs tied to traditional finance.

Nations at risk of undergoing hyperinflation are usually the first to adopt and experiment with CBDCs in an effort to reduce operational costs and speed up cross-border transactions. As a result, many nations from the Asia-Pacific (APAC) region have started eyeing the possibility of a CBDC implementation, keeping in mind the overall stability of their fiat currencies.

Given the presence of major jurisdictions including India, South Korea, Australia, Taiwan, China and Singapore, among numerous other territories, CBDC regulations in the APAC region are bound to create a ripple effect in the way global finance operates. 

Let’s take a deep dive into the various regulations governments in the Asia-Pacific region have implemented.


Australia is one of the biggest crypto players in the APAC region — guided by clear internationally-recognized regulations. While the government has cautiously established a regulated crypto market that allows licensed crypto businesses to operate, the nation has yet to announce an official in-house CBDC.

The Reserve Bank of Australia (RBA) conducted several experiments to test the CBDC waters across use cases spanning cross-border transactions and wholesale markets. In March 2022, the RBA, along with the central banks of Malaysia, Singapore and South Africa, developed and tested an experimental multi-CBDC Platform for international settlements. 

Dubbed Project Dunbar, the experiment concluded that financial institutions could use multiple CBDCs to transact directly with each other on a shared platform to potentially reduce reliance on intermediaries, costs and the time taken to process cross-border transactions.

The RBA also conducted a wholesale CBDC research project in December 2021 named Project Atom to settle interbank transfers and related wholesale transactions. Working in partnership with Commonwealth Bank, National Australia Bank, and Perpetual and ConsenSys, the project was successful in checking the feasibility of using CBDCs in funding, settlement and repayment of a tokenized syndicated loan on an Ethereum-based DLT platform.

While the RBA has considered the idea of an electronic form of the Australian dollar, or eAUD, RBA governor Philip Lowe confirmed no immediate plans to issue a CBDC. However, the country continues to weigh the pros and cons before diving into a decision. 


India is home to the most number of crypto users despite the government’s irregular and mostly anti-crypto takes on the regulatory side. However, the Indian government imposed a law that requires citizens to pay crypto taxes on unrealized capital gains and a tax deducted on source (TDS) on every crypto transaction. As the name suggests, a TDS is a percentage-based deduction for every single crypto transaction.

India’s CBDC, the digital rupee, is expected to launch in the financial year of 2022-2023. The Reserve Bank of India (RBI) defines CBDCs as an electric form of fiat currency that is exchangeable one-to-one with the paper form of the Indian rupee. 

While rolling out a CBDC, India has planned out a phased implementation strategy, which involves examining use cases that could be implemented with little or no disruption to the traditional finance ecosystem. 

Related: DeFi vs. CeFi: Comparing decentralized to centralized finance


Some of the earliest Bitcoin and crypto entrepreneurs and miners have their roots in China. Despite being one of the most pro-crypto nations, recent regulations have forced all crypto-related businesses and mining facilities to close shop within the Chinese jurisdiction.

China is also one of the earliest adopters of an in-house CBDC, e-CNY, accessible through an official mobile application on Android and iOS. The Chinese authorities launched the e-CNY system, in January 2022, as a means to test the true potential of CBDCs in interacting with citizens, commercial banks and payments providers, among others.

For China, introducing an in-house CBDC is an attempt to create a cheaper and more efficient mode of payment. Until June 2021, China was the highest contributor to the Bitcoin mining hash rate — owing to the massive participation from Chinese miners and little to no regulatory resistance. Eventually, China’s anti-crypto stance saw the blanket ban of crypto mining farms, which once contributed to more than 50% mining hash rate for a decade.

South Korea

The Bank of Korea successfully completed the first phase of its central bank digital currency mock testing, which started in August 2021. Currently, the South Korean central bank is in its second phase of CBDC testing, which focuses on testing real-world functionalities such as cross-border remittance, retail payments and offline payments. 

Based on the results obtained in the second phase of CBDC testing, Korea will chalk out plans for an official launch and commercialization plans. 


Singapore has become one of the fastest-growing crypto economies as soon as the country’s financial regulator, the Monetary Authority of Singapore (MAS), began providing operational licenses to crypto exchanges in November 2021.

The country is also one of the most active jurisdictions when it comes to experimenting with CBDCs. In November 2021, the MAS commenced a study on a retail CBDC named Project Orchid to identify its potential implications for financial stability and monetary policy. A retail CBDC is distributed among the general public to be used as a means of day-to-day transactions. 


The Central Bank of Indonesia, Bank Indonesia, believes that the issuance of an in-house CBDC can curb the general public’s interest in crypto investments. 

Just like numerous other jurisdictions, Indonesia partnered with the Bank for International Settlements (BIS) and central banks of other countries to test the international settlement capabilities of a retail CBDC. In doing so, the nation aims to identify the most practical and deployable solutions required to design and implement an in-house CBDC.

Despite its willingness to test CBDCs, the Indonesian government sees the technology as a means to deter the use of cryptocurrencies. An official CBDC launch in Indonesia will be made to ensure compliance with Sharia law, or Islamic banking regulations.


The Bank of Japan (BoJ) began experimenting on CBDCs in April 2021, wherein the central bank ran a year-long test on the technical feasibility of the core functions and features required for CBDCs.

In 2016, BoJ and the European Central Bank (ECB) jointly conducted research on the auditability of CBDCs and distributed ledger technologies (DLT). In its second phase of testing, the Japanese central bank is currently investigating the feasibility of adding functionalities catering to Anti-Money Laundering (AML) and privacy.

While Japan has no immediate plans to issue an in-house CBDC, the central bank is open to issuing CBDC if public demand for cash reduces in due time. 


The Central Bank of Malaysia, Bank Negara Malaysia (BNM), actively researches CBDC focused on various proof-of-concept as pilot projects and experimentations related to enhancing internal policies and technical capabilities. 

Although the Malaysian government has disclosed no plans to issue a CBDC, the central bank of Malaysia will finalize an issuance in the future in case experiments confirm its need. In September 2021, Malaysia, along with the central banks of Australia, Singapore and South Africa, too, participated in Project Dunbar to test the use of CBDCs for international settlements via a shared platform. 

New Zealand

In September 2021, the Reserve Bank of New Zealand (RBNZ) published an issue paper to provide its perspective on a general-purpose CBDC. While the central bank sought public feedback about the document till the end of 2021, the nation has yet to announce an official CBDC launch. 

In February 2022, the RBNZ announced the commencement of a multi-stage and multi-year effort CBDC proof-of-concept design work. The government of New Zealand aims to tackle various nefarious or illegal activities made possible by fiat currency.


Pakistan’s central bank, the State Bank of Pakistan (SBP), commenced the study of the various possibilities brought about by CBDCs. However, an official launch has not yet been announced.

Despite the recent interest in studying and eventually developing an in-house CBDC, Pakistan has historically displayed anti-crypto sentiments. Depending on the conclusions of the ongoing tests, SBP might consider launching a digital currency by 2025. 

Some of the key factors Pakistan’s central bank will consider while developing a CBDC includes fast-tracking financial inclusion and reducing inefficiency and corruption.

Myanmar (Burma)

With the ultimate aim to improve financial activities in Myanmar, the military regime of the country disclosed plans to create and launch a CBDC as a kyat-based legal tender.

However, the country has yet to reveal whether it plans to collaborate and outsource the job to local companies or build it in-house. The final decision for issuing an in-house CBDC will be heavily weighed against the various pros and cons identified during the experimentation phase.


The following is a list of some of the prominent countries from the Asia-Pacific region that have either not shown interest or actively participated in testing or developing CBDCs:

Countries not actively participating in testing or developing CBDCs

Despite the evident improvements that digitization via CBDCs bring to the fiat economy, many countries in the APAC region, including the ones in the above list, maintain reluctance to step into the blockchain economy. While some countries simply don’t have the financial capacity to delve into experimentation, others are waiting for the results of the existing CBDC experiments conducted by other countries

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