Saturday, June 25, 2022

Slide Slide
Home Technology Central bank digital currency: Malaysia’s Central Bank to run a pilot project

Central bank digital currency: Malaysia’s Central Bank to run a pilot project

The central bank will also actively assess the potential value proposition of central bank digital currency in light of developments in the digital assets and payments space

Central banks of the world are slowly beginning to acknowledge the impact of digital payments on the financial system and economy. When China launched its own Digital Yuan, interest intensified and countries then began actively experimenting with the opportunities presented by exploring their own central bank digital currency (CBDC) but not all preferred China’s retail approach to it. Malaysia’s Central Bank, in Southeast Asia, signalled that instead of focusing on retail CBDC similar to China’s Digital Yuan or Sweden’s e-krona, it would rather run a pilot project to gauge the merits of a CBDC.

Suhaimi Ali, Director of Financial Development and Innovation at Bank Negara Malaysia (BNM), said during a Fin-tech Fireside Asia session that “Malaysia’s central bank will be running a proof-of-concept (POC) project to gauge the merits of a central bank digital currency (CBDC) with an initial focus on wholesale CBDCs”.

He revealed that at the initial stage, BNM is unlikely to focus on retail central bank digital currency. “We acknowledge that the CBDC landscape is evolving very rapidly, particularly over the past year due to the rapidly evolving digital assets and payment space which has prompted central banks globally”, said Suhaimi.

An analysis by PWC earlier this year showed that especially compared to nations such as Cambodia, Thailand, mainland China, Hong Kong, and Singapore, which have emerged as being amongst the most mature CBDC projects to date, Malaysia in Asia is behind its neighbours in the central bank digital currency arena. Another separate report by Bank for International Settlements (BIS) released in January 2021 found that about 60 per cent of central banks are conducting experiments or POC projects, up from 42 per cent in 2019, while another 14 per cent are moving forward to development and pilot stages.

BNM has not shared any timeframe on its own central bank digital currency. In its Annual Report 2020 however, the institution said it does not have any immediate plans to issue a digital currency. “Moreover, domestic payment systems, including the real-time retail payments platform (RPP) also continue to operate safely and efficiently to support the needs of the economy and allow real-time digital payments”, it said.

The central bank will also actively assess the potential value proposition of central bank digital currency in light of developments in the digital assets and payments space. “We will also actively monitor the trend of key indicators with direct impact to our mandates, which may provide useful data points for us to evaluate the merits of CBDC issuance. These include, among others, the level of physical cash usage in Malaysia, the extent to which privately-issued digital assets are used for payments in Malaysia, and the extent to which CBDC is being used to facilitate cross-border trade”, it said.

CBDC issuance, BNM said, should complement existing payment instruments including physical cash to ensure that all Malaysians, in particular the underserved communities, have continued access to safe and efficient payment solutions.

Also read:DigiYatra: A paperless journey experience for domestic air traveller

Do Follow: CIO News LinkedIn Account | CIO News Facebook | CIO News Youtube | CIO News Twitter

khushbu Soni CIO News Mercadeo
Khushbu Sonihttps://www.cionews.co.in
Chief Editor - CIO News | Founder & CEO - Mercadeo

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -1x1 banner1x1 banner1x1 banner1x1 banner

Most Popular

Digital literacy according to me is a seamless adoption of digital revolution, says Melwyn Rebeiro, Head of IT Security at AEON Credit Service India...

While youth have been at the forefront of technology adoption and will continue to be so, there has been a significant increase in digital...

India’s artificial intelligence investment to be 2.5% of global total in 2023

Firms are increasingly relying on contracting and gig models while focusing on building internal artificial intelligence talent through reskilling and up-skilling India, the world’s second...

Fin-tech start-up Setu acquired by Pine Labs in $70 to 75mn

Post the buyout, the fin-tech start-up, which has 90-100 employees will retain its brand identity, business and team The acquisition of the Bengaluru-based API fin-tech...

Cyber security strategist Dr. Mukesh Mehta joins Monarch Capital as Group CTO

Mehta describes himself as someone who is capable of solving the most critical problems revolving around the IT and the cyber security industries Cyber security...

Recent Comments