Digital currencies are currently being considered by multiple central banks in Asia, to be issued for cross-border payments between countries.
Digital Currencies as an Option in Hong Kong and Thailand
The Hong Kong central bank and Thai central bank are joining forces, as they consider on issuing different digital currencies, to be able to use them in cross-border payments. The financial regulatory agencies in both countries released a report that defines the ease and convenience of issuing Central Bank Digital Currencies, or CBDC. According to the regulatory agencies, this action will make it easier, less costly, limit risks, and add more transparency, to cross-border payments.
However, there is no specific time for when the launch of digital currencies will take place, yet. In contrast to decentralized currencies such as BitCoin, Central Bank Digital Currencies are completely regulated by central banks and are a virtual representation of traditional fiat currencies.
According to the Hong Kong Monetary Authority (HKMA), developing Central Bank Digital Currencies used to be an unnecessary tool. It is now currently considered as a form of innovation for efficiency and development, which is already in the works.
Hong Kong and Thailand central banks are not the only financial regulatory agencies who are considering digital currencies in a new light. Although most regulators are on board with the benefits of CBDCs, there are only handfuls that are making practical progress.
What About the Rest of Asia?
In the People’s Republic of China, the People’s Bank of China is progressing to become the first central bank to issue and create its very own virtual currency. Despite the rumors that sparked that the Chinese financial regulatory agency was going to issue CBDC in 2019, it is expected to launch this year.
On the other hand, the constant push from Facebook on Libra also caused financial regulators to think through on the regulations, use, and the tools of virtual currencies. There are various central banks from both Europe and Asia who have introduced a joint study to introduce virtual currencies in their financial database.
This could mean that Asia will be one of the first place to allow their citizens to deal with their daily expenditures with virtual currencies that they have created. Since virtual currencies seem to be very efficient and relatively cheaper when it comes to cross-border payments, it will make things much easier for individuals who constantly transfer funds from one country to another.