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In the years ahead, new financial market infrastructures based upon digitized central bank liabilities called wholesale CBDCs may emerge in Asia. Given the dollar's preeminent role in intra-Asia trade and finance, how these new systems are linked to each other-and to dollar payments channels-will depend in part on the role that U.S. institutions play. The launch of new, technologically sophisticated national-level large-value payment systems across emerging market economies in Asia could ultimately help advance U.S. interests in the region-including by increasing the efficiency and reducing the costs of converting dollars into local currencies. The extent to which this will happen depends in part on whether Washington creates a policy environment that helps facilitate U.S. institutions and technologies in playing a more significant role in the build-out of more efficient, lower-cost cross-border channels for wholesale financial transactions in Asia.

According to the World Bank, download speeds in high-income countries increased significantly between 2019 and 2023, while speeds in lower-income countries stagnated. As of 2022, North America and East Asia have the speediest internet. This difference in broadband speeds can mainly be attributed to investment. In 2020, nearly 90% of global telecommunication investment came from East Asia and the Pacific, Europe and Central Asia, and North America. Meanwhile, low- and middle-income regions such as Latin America and the Caribbean, South Asia, and Sub-Saharan Africa accounted for less than 10% of total investment.

"Mobile internet connectivity has continued to grow in many countries across South Asia during 2020. Despite, or perhaps partly driven by, the COVID-19 pandemic, 34% of the population were using mobile internet in the region, double what it was in 2014 and an increase of 40 million people since 2019. Mobile broadband coverage has significantly improved over the last six years, now covering 95% of the population. However, as the State of Mobile Internet Connectivity 2021 highlights, there are still 1.1 billion people in South Asia not using mobile internet, despite being covered by a mobile broadband network. This usage gap is the highest globally at 61%."

WorldPay data from FIS has found that the Asia-Pacific region reached a much higher market share of mobile payments than other parts of the world. 44% of the transactions made at point of sale (POS) were carried out with a mobile phone instead of a debit/credit card or cash and 69% of online shop payments were completed on a mobile device. According to Global management consulting firm McKinsey, Southeast Asia has become a "wallet-first region." Africa had the second highest share of POS mobile payments, at 12%, while Europe only saw 8% of POS transactions carried out on mobile.

As of the end of July, 984 financial institutions from 97 countries and regions were part of China's Cross-Border Interbank Payment System (CIPS). The system was created in 2015 to help globalize the yuan, by providing an easier way for participants to settle and clear yuan-denominated payments. Members can choose to either take part in CIPS directly, meaning they maintain their own accounts within the system, or indirectly, meaning they work through direct members. More than 70% of participants are in Asia, followed by 124 in Europe, 40 in the Americas, and 37 in Africa. The African presence is due to China's economic clout in the region, especially with its Belt and Road infrastructure-building initiative.

"Drawing on survey responses from 34 Asian economies and country case studies, this note takes stock of recent developments related to central bank digital currencies (CBDCs) and crypto assets in Asia. The survey finds that there is significant heterogeneity in terms of stage of development, but the emergence of private crypto assets has created an impetus to consider CBDCs. While most countries are engaged in research and development, with some at advanced stages of testing and pilots, very few countries are likely to issue CBDCs in the near-to-medium term, reflecting the still considerable uncertainties. Still, country experiences so far provide some key insights for others in their journey in this area."

Binance Asia Services withdrew its application to the Monetary Authority of Singapore (MAS) for a license to operate a regulated crypto exchange in the country. Binance Asia Services was among about 170 firms that had applied to the MAS for a license to provide crypto services. The company had been operating under a temporary exemption during the licensing process

The IMF published a paper on central bank digital currency (CBDC) developments in the Middle East and Central Asia (ME&CA) region. A survey of IMF country teams representing 31 ME&CA countries found that 19 are considering issuing or exploring CBDC, most of which are at the research stage, although a few are at the proof-of-concept (POC) stage (Bahrain, Georgia, Saudi Arabia, United Arab Emirates). Kazakhstan is most advanced in its CBDC journey, having initiated two digital tenge pilots. The region's fragile and conflict-affected states and low-income countries (LICs) have expressed limited interest. The paper also includes three country case studies (Jordan, Kazakhstan, and Libya).

Since ICOs and STOs are clearly here to stay it is worthwhile to take a look at what regulators in Asia are doing in response to this.

According to the IMF's Financial Access Survey, while mobile money continues to grow in its epicenter in Africa, it's also taking off in Asia. The survey also provides a wealth of information on the access to and use of basic financial services, including breakdowns by gender.

Bitcoin has shown a tendency lately to clock its intraday low in the Asian or European session, and end near daily highs in the U.S. For example, the low on Monday was after 3 a.m. New York time and the high around 4 p.m. Tuesday's low was right at the start of the Asia session before a run higher and steadying out near $54,000. Somewhat similar patterns were evident Wednesday and Thursday. A theory has emerged that this may be due to tokens being mined and sold in Asia, and then buyers come into the market in U.S. hours.

Analysts at QCP Capital, a team of traders in Asia, see several signs of "institutional exhaustion." They did a timezone analysis which broke down BTC moves into Asia hours vs. US hours (12 hours each). Since March last year, the clear pattern has been relentless US buying while Asian whales and miners have been on the offer.

Out of the 50 digital challenger banks operating in Asia Pacific (APAC), just ten operators are profitable. These providers are primarily located in China and Japan, indicating that the two nations offer the most mature and developed digital banking landscapes in the region, according to a new analysis by the Boston Consulting Group (BCG).

A drove of virtual banks is preparing to launch across Asia - Singapore plans to award up to five new licences by the middle of next year. And established lenders want to exploit their potential as a test bed for their own risk management practices - from credit risk management to fraud monitoring capabilities.

"What people in London, New York and Silicon Valley don't understand is that Asia is now setting the pace in financial services innovation," says James Lloyd, a partner at EY Asia-Pacific focusing on fintech and payments.

SBI Ripple Asia is launching a store settlement service using the consumer-focused XRP-powered payments app MoneyTap, jointly developed by SBI and Ripple. MoneyTap implements Ripple's blockchain solution xCurrent to enable near-instant domestic bank-to-bank remittance services.

The Global System for Mobile Communications (GSMA) released a COVID-19 response tracker that monitors mobile money-specific regulatory policy, government and provider interventions globally, collated using both primary and secondary sources and updated weekly. The tracker is intended to support mobile money providers and regulators with a mobile money-specific policy response database and learnings from other markets, in order to effectively tailor policy responses for their market. The tracker collates data from 32 countries, spread across Sub-Saharan Africa (17), East Asia & Pacific (7), South Asia (4), Middle East & North Africa (3), and Latin America & Caribbean (1). An interim analysis of the data collated in the tracker showed preferred policy response instrument, regional variations, and the validity period of these instruments.

About $50 billion in cryptocurrency assets have left China in the past year, a possible indication that investors are dodging rules that limit how much capital they're allowed to transfer from the nation, according to Chainalysis. Tether accounted for more than $18 billion of the outflows from East Asia in the period. Tether has become a U.S. dollar replacement for many people in China, with lots of Chinese businesses and merchants, especially those working overseas, now accepting Tether. https://blog.chainalysis.com/reports/east-asia-cryptocurrency-market-2020

ASEAN Plus Group has released a comprehensive guide to Asia-Pacific payment services regulations. For each country, it gives an overview of the current state of the domestic payment industry, the regulators in charge of overseeing the sector, the different types of licenses available, the licensing requirements, the state of cryptoassets regulations, intellectual property laws in place, as well as anti-money laundering and counter-terrorism financing (AML/CTF), tech risk, and data privacy requirements, among other key topics.

The Bank of Japan (BOJ) will reportedly begin preparations to conduct a retail central bank digital currency (CBDC) pilot next Spring (2023) year. According to Nikkei Asia, "after spending two years verifying whether there are any problems with bank account deposits and withdrawals, the BOJ will decide whether to go ahead with a digital yen in 2026." However, it's not clear yet whether this is a "pilot" (testing in the "wild" with real live users) or a proof of concept (tested among financial institutions in a "laboratory" setting).