CBDC in Emerging Asia – Strongly develops and concerns loom

CBDC in Emerging Asia – Strongly develops and concerns loom

Today, especially in emerging Asia, the rise of technology brings many opportunities to develop and reach a new higher level than in the past. Technology now can support not only commercials when sellers and buyers don’t need to stand close to each other to be able to trade and exchange money for each other.

The currencies of nations are also, with the appearance of CBDCs in the future, people in two nations only with the app can pay for products or services each other with faster, cheaper, more transparent, and more inclusive cross-border payment services using them.

However, the advent of these currencies also raises concerns about security, privacy, and other political issues for these emerging Asian countries. Let’s find out with FinFan to know more about these opportunities and problems that CBDCs bring to emerging Asia.

CBDC is strongly developed in Emerging Asia

Recently, a survey on a Singapore fintech news channel, Fintech News with 4,157 valid responses from professionals in diverse fields, the survey unearthed complex insights, revealing a landscape marked by limited understanding, divided support, and diverse perceptions across various regions and demographics.

With more than 59% of members in the survey believing that governments should launch digital versions of fiat currencies, some APAC countries have been developing their own CBDC such as China, Thailand, and India.

Should the governments in emerging Asia lauch CBDCs

Throughout that survey, we can see very clearly other issues related to CBDC such as, the majority of people who support and want to learn more about CBDC are young people under the age of 30 with over 51 %, only 39% of survey respondents aged 55+ are interested and want to learn more about this new currency.

These numbers also show that countries with a young population like in the APAC region will be the countries that support the issue of the government should develop the CBDC. While only 37 percent of respondents in developed markets preferred CBDCs, 61 percent in emerging markets favored their adoption.

Another special feature of the survey is that it shows that in developing countries like the Asia Pacific (APAC) region, their belief in CBDC is related to solving financial problems when these coins can support faster and less expensive transactions.

What are the concerns about CBDC in APAC?

  • Cybersecurity and fraud

In also another report from Fintech News: Asia's leading fintech site from Singapore also pointed out the key issues from the cybersecurity report, when this number reached 35 billion transactions in April 2022.

That's an alarming number for currency conversions between countries. Moreover, CBDC is a form of currency that is managed by the state and regions, it is possible that the number will continue to increase.

  • Data privacy

The next disadvantage that CBDC brings is that if it is managed in a centralized form instead of a decentralized one, data security issues will also arise for currency conversion between currencies. country, because at this time, hackers only need to penetrate the system at the node managing it to be able to obtain information or exchange information of organizations or individuals to perform fraudulent acts.

  • Lack of practical use cases

If regulated by an authority of a country or region, a CBDC will not be much different from a digital fiat currency. And if this coin is created to limit the use of cash, e-wallets, and fiat payment methods can also solve the same problem, users do not need to download specialized apps to own CBDC too.

  • Design choices

Another issue that arises is how much CBDC will be issued and how much it can be as infinite as fiat money. If there is a limit, the nature of being staked with a certain fiat currency will not be absolutely guaranteed because fiat money is inflationary and digital money is not.

In summary, the introduction of CBDC coins into the market brings both benefits and doubts about them. However, CBDC is still the technology of the future to bring users practical values ​​such as limiting cash printing and making transactions between countries happen faster with lower costs.