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Taiwan is reportedly looking to complete trials of its prototype central bank digital currency (CBDC) by the third quarter of 2022. Its most recent design is a two-tier system that allows consumers to exchange bank deposits with digital currency. In addition, the CBDC can also be linked to credit and debit cards and will be legal tender.

The Bangko Sentral ng Pilipinas (BSP) is moving ahead with a research project focused on central bank digital currency (CBDC). The BSP's  exploratory work started in 2021, focusing implications of CBDC for the whole financial system. A national payment system assessment was later conducted which resulted in the identification of relevant use cases of wholesale CBDC aimed at enhancing the payment system's safety, resiliency, and efficiency. As a next step, the BSP targets to roll-out Project CBDCPh aimed at building organizational capacity and hands-on knowledge of key aspects of CBDC that are relevant for a use case around addressing frictions in the national payment system.

"Thailand's Security and Exchange Commission will implement a ban on crypto as a payment method starting from April 1, 2022. The regulator said that cryptocurrencies may affect the financial system's stability, posing risks to the country's economy. Other risks highlighted by the SEC include the loss of value due to price volatility, cyber ​​theft, and personal data leakage. The regulator added that cryptocurrencies such as Bitcoin may be used as a tool of money laundering."

Bank Negara Malaysia laid out its central bank digital currency (CBDC) plans in its 2021 annual report. Beyond its current participation in the Bank for International Settlements (BIS) Innovation Hub's Project Dunbar for cross border payments, it is also planning to explore a domestic wholesale CBDC later this year and a retail digital currency in 2024. https://www.bnm.gov.my/-/ar2021_en_pr

Reserve Bank of Australia (RBA) Assistant Governor Brad Jones discussed where the case for a retail CBDC in Australia fits into the wider international debate over the future of money, and provided an update on the RBI's retail CBDC pilot project. On balance, the RBA does not yet see a case for issuing an eAUD, but the central bank is "keeping an open mind" as its eAUD pilot program remains in full swing. The program has not prescribed use cases in advance, instead inviting the applicants (80 of them) to propose their own use cases (140), from which the RBA eAUD project team will select to take forward into the pilot phase in early 2023.

"India's digital payment volume has climbed at an average annual rate of about 50 percent over the past five years. That itself is one of the world's fastest growth rates, but its expansion has been even more rapid-about 160 percent annually-in India's unique, real-time, mobile-enabled system, the Unified Payments Interface (UPI). Transactions more than doubled, to 5.86 billion, in June from a year earlier as the number of participating banks jumped 44 percent, to 330. Values nearly doubled in the same period. In addition, the RBI in March introduced a UPI for feature phones (older devices with buttons instead of touchscreens) that can potentially connect 400 million users in distant rural areas."

The RBI has said the central bank digital currency (CBDC) will remain anonymous and regulations that are applicable to paper currency will prevail on the e-rupee. RBI deputy-governor T. Rabi Sankar said the central bank was looking at solutions to make CBDC at par with paper currency when it comes to having the key feature of anonymity which has ensured that cash is still used in the developed world. ``The challenge is to ensure the anonymity because the normal understanding is that anything digital leaves a footprint. This can have various solutions," Sankar said. The RBI is looking at a technological solution and also a legal solution to help assuage the concerns on this problem. Sankar said the start-up or the fintech ecosystem would have to innovate and launch various use cases for the new currency. RBI governor Shaktikanta Das said the rules governing deposits and withdrawal of paper cash will also apply to digital currency.

"As regulators look to regulate exchanges in light of the FTX's collapse, they would do well to look to Japan, which has some of the most mature rules in the world."

The National Bank of Kazakhstan (NBK) and the Payment and Financial Technology Development Center of the Bank of Kazakhstan (NBK) published a report on the results of the study on the need to introduce the digital tenge. It is reportedly recommending making the central bank digital currency (CBDC) available as early as 2023 with a phased expansion of functionality and introduction into commercial operation until the end of 2025. Unfortunately the report won't be available in English until later this week, at which point I'll be able to verify some of the facts and plans. For example, the report is saying that a pilot was just wrapped up, but it's unclear whether it's a pilot of proof of concept, since I don't know the composition of the test users. If they're pulled from the general public, it is a pilot, but if the test subjects are limited to central bank staff, it's a proof of concept by my taxonomy.

The National Bank of Kazakhstan (NBK) and the Payment and Financial Technology Development Center of the Bank of Kazakhstan published the English version of their report on the second phase of their digital tenge central bank digital currency (CBDC) feasibility study.The second phase was comprised primarily of proof-of-concept work involving select financial institutions, merchants and final users. The report calls it a "pilot" but is silent on who the selected final users were. If they were central bank employees, it is a proof-of-concept by most CBDC exploration workflow taxonomies, but if users were selected from the general public, then it's a pilot. In any case, the report recommends a phased rollout starting in 2023 with a gradual expansion of its functionality and step-by-step introduction into production scale by the end of 2025.

The International Monetary Fund (IMF) is recommending several phases and "extensive" pilot projects for the Bangko Sentral ng Pilipinas (BSP) wholesale central bank digital currency (CBDC) especially in cybersecurity issues, laws and regulations that will cover implementation. A wholesale CBDC is being considered in the Philippines as a possible means to enhance existing payment and settlement functions. While the BSP charter, amended in 2019, does allow for the issuance of wholesale CBDC, the regulatory framework "may need to be revisited to ensure governance and financial stability risks are addressed." https://www.imf.org/en/Publications/CR/Issues/2022/12/15/Philippines-2022-Article-IV-Consultation-Press-Release-and-Staff-Report-526983

"The e₹-R would be in the form of a digital token that represents legal tender. It would be issued in the same denominations that paper currency and coins are currently issued. It would be distributed through intermediaries, i.e., banks. Users will be able to transact with e₹-R through a digital wallet offered by the participating banks and stored on mobile phones / devices. Transactions can be both Person to Person (P2P) and Person to Merchant (P2M). Payments to merchants can be made using QR codes displayed at merchant locations. The e₹-R would offer features of physical cash like trust, safety and settlement finality. As in the case of cash, it will not earn any interest and can be converted to other forms of money, like deposits with banks."

As part of its e-CNY central bank digital currency (CBDC) pilot, the People's Bank of China (PBOC) has launched a "hongbao" red packet feature, that allows users to send each other digital yuan-filled red packets. This comes just a month ahead of the Lunar New Year, when the Chinese traditionally give out red envelopes filled with cash to family and friends as a symbol of well wishes. The e-CNY app has been available in limited trials since 2020, but it continues to be an uphill battle to convince the Chinese public to use it. Digital yuan transactions hit $88 billion yuan ($12 billion) at the end of 2021, crossed the $100 billion yuan threshold at the end of August 2022.

Xie Ping, a former People's Bank of China (PBOC) research director, made critical public comments about China's central bank digital currency (CBDC) at a recent university conference. After launching in 2020, e-CNY transactions hit $88 billion yuan ($12 billion) at the end of 2021, after which growth slowed down significantly, only crossing the $100 billion yuan threshold at the end of August 2022. Ping said existing digital retail payment platforms such as AliPay and WeChat Pay "have formed a payment market structure that have met needs for daily consumption". Hence,  the e-CNY use case needs to expand from its current use as a cash substitute and opened to other uses such as the ability to pay for financial products or connected to more payment platforms to boost adoption. https://finance.caixin.com/2022-12-28/101982996.html

India's National Payments Corporation of India (NPCI) has extended access to the Unified Payments Interface (UPI) to non-resident Indians from 10 countries (Australia, Canada, Hong Kong, Oman, Qatar, Saudi Arabia, Singapore, United Arab Emirates, United Kingdom, and the United States). Indians living abroad comprise the world's largest overseas remittance-sending diaspora.  Other countries like Nepal, Bhutan, and Singapore, have already signed deals with NPCI to integrate their payment networks with UPI, enabling seamless cross-border payments. https://www.npci.org.in/PDF/npci/upi/circular/2023/UPI-OC-161-Extension-to-UPI-Circular-No-60-Crediting-Debiting-Non-Resident-accounts-in-UPI.pdf

Brunei Darussalam Central Bank (BDCB) and Bank of the Lao PDR (BOL) have officially joined the ASEAN Regional Payment Connectivity (RPC). The group now has eight member countries. RPC is an initiative that aims to promote, faster, cheaper, more transparent, and more inclusive cross-border payments through, among others, quick response (QR) code-based payment and fast payment modalities.

The IMF published an overview of the development of digital money and payment systems in twelve Pacific island countries (PICs), assessing potential benefits and risks, with a focus on how they can harness digital technology to enhance financial inclusion and payment efficiency while minimizing risks. The paper also examines the prerequisites for successfully adopting various forms of digital money and proposes a strategic framework for policy decisions (see Figure 10). It advocates a gradual, well-informed approach, tailored to PICs' unique monetary and financial circumstances, including the presence of national currencies and the maturity of payment systems. Moreover, the paper suggests that a regional approach could help address capacity and scalability challenges in introducing new digital money forms and payment methods in PICs.

According to National Bank of Cambodia Governor Chea Serey, cross-border QR code payments made through Cambodia's Bakong digital payment system are set to boost the use of the nation's riel currency. Bakong can already be used for QR code-based payments between Cambodia, Thailand, Laos and Vietnam, and those involving China's UnionPay. These cross-border payments can only be carried out in riel, so Cambodian citizens need to have a riel Bakong account to make payments in Thailand, for example, while Thai tourists can only make QR code transactions in Cambodia if the place where they are shopping accepts riel. The central bank plans to enable cross-border payments using Bakong with India as early as June and is also working with Japan.