Singapore, Cambodia among Asean countries eyeing digital currencies

Singapore, Cambodia among Asean countries eyeing digital currencies

People wearing face masks pass the Marina Bay Sands in Singapore on Oct 28, 2021. (Reuters photo)

HONG KONG: South Asian countries such as Singapore and Cambodia are exploring the launch of central bank digital currencies (CBDCs) to enhance payments efficiency and to encourage start-ups and e-commerce in the region, a panel hosted by the South China Morning Post was told on Thursday.

With a relatively young population that has a median age of 30 years and a high percentage of internet and mobile phone sue, Southeast Asia has seen a lot of start-ups come up in digital payments, e-commerce and cryptocurrencies.

“Southeast Asia has been a very fertile ground for digital payment innovation,” Benedicte Nolens, who heads the Hong Kong centre of the Bank for International Settlements (BIS) Innovation Hub, told the panel held under China Conference: Southeast Asia. “When you see online e-commerce growth, typically it goes fairly well with new payment mechanisms,” she added.

CBDCs have been growing in popularity in Asia. China started developing its digital currency, called the e-yuan, in 2014, but now Hong Kong is also studying the launch of the e-HKD. The Hong Kong Monetary Authority, the city’s de facto central bank, has been working with the People’s Bank of China (PBOC) and the central banks of Thailand and the United Arab Emirates on project “mBridge” to establish a CBDCs settlement platform.

Elsewhere, Singapore last year teamed up with central banks in Australia, Malaysia and South Africa, along with (BIS) Innovation Hub, to explore “Project Dunbar” for the development of platforms for the cross-border settlement of different CBDCs.

“There is a lot of room to grow in the internet economy in Southeast Asia.

Cambodia is a small country of 16 million people, where we have about 20 million mobile phone subscriptions,” said Serey Chea, assistant governor of the National Bank of Cambodia. “It is almost like you know, a baby is born and they are already given a mobile phone subscription … some have two or three mobile subscriptions.”

Covid-19 had over the past two years boosted the digitalisation of economies, after many governments imposed lockdowns and encouraged people to shop online, Chea said. This had boosted digital payments in Cambodia and the rest of the world.

Singapore has seen the number of technology start-ups increase by 10 times since 2015, with traditional lenders such as DBS setting up platforms for the trading of cryptocurrencies such as bitcoin.

“It is a very interesting progression here in Singapore, because more people are interested in cryptocurrencies,” said Frederick Fung, chairman of the Association of Crypto Currency Enterprises and Start-ups in Singapore. He said it was not just the young who were interested in cryptocurrencies – older customers were also adopting digital payments.

Nolens dismissed concerns about security and privacy. “Cash is the most anonymous instrument that exists today. So if cash goes digital, is actually easier to monitor than if cash is purely on paper, or in the form of coins,” she said.