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The Emergence of CBDCs in Japan and the APAC Region

Amit Malik
August 28, 2023
The Emergence of CBDCs in Japan and the APAC Region

Central Bank Digital Currencies (CBDCs) have garnered significant attention in the global financial arena, particularly within the Asia-Pacific (APAC) region. From Japan to emerging economies like India and Thailand, countries across APAC are actively exploring the potential of CBDCs and their impact on the financial ecosystem. In this article, we delve into the emergence of CBDCs in Japan and the broader APAC region, examining the driving forces, trends, and their profound implications.

The Rising Interest in CBDCs

Interest in CBDCs has been steadily growing throughout APAC. This surge is evident in speeches and discussions, reflecting the region's increasing fascination with CBDCs. Figure 1 (left panel) illustrates the remarkable rise in references to CBDCs in recent years, with a broad spectrum of nations, including advanced economies and emerging markets, showing keen interest.

China, a global leader in CBDC experimentation, has played a pivotal role in propelling the CBDC narrative forward. However, it's not solely leading economies like China that are making strides. Other markets, such as India and Thailand, are rapidly advancing in their CBDC initiatives. Even smaller countries and Pacific Island countries like Nepal and the Marshall Islands are actively engaged in CBDC research and development, highlighting the widespread interest in this transformative technology.

The Catalyst

The surge in digital currency assets in 2020–21 significantly contributed to central banks' interest in CBDCs. As the digital currency market experienced exponential growth, central banks sought alternative means of payment to counteract the volatility associated with unbacked private digital currencies. Mitigating risks to the financial system became a top priority.

Asian economies actively participated in the digital currency’s rally in 2021, witnessing substantial growth in digital currency asset transactions and volumes (Figure 1, right panel). However, the subsequent "crypto winter" in 2022, affecting Asia and the global digital currency market, accelerated policymakers' interest in safeguarding the payment system and ensuring consumer protection. This focus includes exploring consistent regulatory frameworks for digital currency assets and their potential integration with CBDCs in select cases.

The Executives’ Meeting of East Asia Pacific Central Banks (EMEAP), for instance, actively discusses CBDCs' implications on monetary policy operations and central bank balance sheets. Members of EMEAP, representing economies at various stages of development, tailor their CBDC designs to unique market dynamics and policy requirements.

The IMF Survey

In early 2022, the International Monetary Fund (IMF) conducted a comprehensive survey of its country teams and authorities across the Asia-Pacific region. The survey covered a wide range of economies, including 7 advanced economies, 10 emerging market economies, 8 low-income countries (LICs),, and 11 PICs. Despite differences, both groups face common challenges in the CBDC landscape. The survey includes 14 case studies, providing insights into the motivations and strategies of different countries within the region.

Innovation Drive

The Asia-Pacific region has long been a hub for digital innovation. The introduction of CBDCs offers the opportunity to enhance existing payment frameworks further, reducing transaction costs and increasing efficiency. CBDCs can play a pivotal role in promoting financial inclusion and stability, particularly in middle-income countries.

The IMF recognises the importance of staying informed about these developments, as it aligns with its core mission of safeguarding macro-financial stability.


In conclusion, the emergence of CBDCs in Japan and the Asia-Pacific region represents a narrative of technological innovation, financial resilience, and cross-border collaboration. As interest in CBDCs continues to soar, driven by the surge of digital currencies and the pursuit of robust financial systems, the region is poised to shape the future of digital currencies on the global stage.

As this transformative journey unfolds, stakeholders, both domestically and internationally, must closely monitor CBDC developments within the Asia-Pacific region. The implications of this financial revolution extend far beyond individual nations, impacting the global financial ecosystem. Japan's leadership in CBDC development sets a precedent for the region, offering the promise of increased financial inclusion, efficiency, and economic integration. Challenges remain, but the path towards a digital future for money is well underway across the entire APAC region.

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