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Five Reasons Why Digital Currencies Will Influence Consumer Behaviors Listen with ReadSpeaker

The digitization of money is speeding ahead in Asia. At the heart of this revolution are digital banking licenses, which create new banks to operate exclusively online for customers using a mobile phone.

Another emerging factor is the development of central bank digital currencies (CBDC). These national e-currencies will deploy blockchain technologies to make all transactions in an economy cashless. In essence, notes and coins will convert into a fluid digital form.

This touchless financial future may be closer than we think. The values of cryptocurrencies like Bitcoin and Ethereum have surged and swooped, and upscale brands are adapting their payment processes to accept them.

Meanwhile, a survey of over 60 central banks by BIS revealed that more than 80 percent are researching or developing their e-currency formats. Each market will tailor their digital currency to the needs of their financial systems and the digital preferences of users.

While cryptocurrencies raised the profile of tokenized money, their impact on day-to-day consumer behavior will be limited. They are simply too expensive for most consumers to afford and trade for goods and services. Moreover, China is among the markets starting to introduce strict curbs on cryptocurrency transactions.

CBDCs are different. Once in circulation, they will radically alter the way people perceive and use money, both at home and abroad. Brands, retailers, suppliers and consumers will need to keep pace with CBDC programs because various models are being researched.

CBDCs are hot news because they will make money an entirely invisible resource. Governments across Asia view this as an opportunity to broaden financial inclusion and raise digital literacy. Issuing a national e-currency will channel all payment processes through a central system rather than the fragmented banking structures that exist in many countries.


Each transaction creates a trackable payment history for the user. Retailers and payment providers will learn about the shifting purchase patterns of customers and be able to personalize their services and partnership promotions to each user. Therefore, excluding users from financial services based on previous credit histories may no longer occur.



  • Access to a smartphone will become more important for securing a digital currency account than a person’s previous credit history or lack of one
  • More people will be able to buy products and receive payments, and purchase extra services online like insurance, content streaming, skills training and telehealth
  • Managing a CBDC account via an app should broaden financial inclusion for millions of users that are currently unable to open a bank account

The urgency to develop CBDCs “has been accelerated by the onset of COVID-19 and a global need to transparently distribute and track economic stimulus funding efficiently to individuals,” said a report by KPMG. Simultaneously, consumers of all ages are embracing the time-saving convenience of digital wallets and QR code payments, particularly for smartphone-based shopping, food deliveries and ride-hailing.


These push factors mean that CBDCs are moving past the hype and into production, said KPMG, which cited China, Cambodia, Sweden, Bahamas and the UK as global first movers. Other markets across Asia are also making swift progress.



  • A definitive shift towards cashless transactions has occurred over the past year, which is likely to further accelerate and diversify
  • The adoption of e-payments by customers, clients and suppliers means companies will need to reassess their accounting strategies across the entire business
  • CBDCs will likely make payments faster and more efficient but putting the necessary business processes in place ahead of time will be vital for seamless adoption

China's e-Yuan is perhaps the most talked-about CBDC because it will likely speed up the internationalization of the Chinese currency and the opening up of its financial markets. The e-Yuan has been extensively trialed since October 2020 with consumers for retail payments in selected cities, including Shenzhen, Chengdu and Suzhou.


Online service providers, such as shopping marketplace, video platform Bilibili and ride-hailing app Didi Chuxing, have joined the e-Yuan pilot scheme. The next phase will see six major Chinese banks offering customers an e-Yuan wallet account on a trial basis.



  • Chinese consumers were early adopters of e-payment formats and this should result in a swift take-up of the e-Yuan when it is officially launched
  • The pace of growth in China’s digital economy is likely to be stimulated by making e-wallet accounts easier to use through a centralized payment system
  • A successful rollout of the e-Yuan could see it become accepted for payments and purchases in other Asian markets by Chinese travelers

An innovative, smaller-scale project is underway in Cambodia. Named after a revered ancient temple, Bakong was launched by the National Bank of Cambodia in October 2020. It deploys Japanese blockchain technology to make mobile payments faster and easier.


Bakong functions as a central clearinghouse for different e-wallet providers, bringing transparency to Cambodia’s previously fragmented financial system. Bakong also enables consumers to navigate the dual-currency economy, comprising the Riel and the US dollar.


By March 2021, five months after its launch, Bakong counted 12 e-wallet providers with 26 more signed up to join and 5.6 million active users. That is equivalent to one-third of Cambodia’s 17 million population.



  • Bakong is not a digital currency but a digital wallet clearing system designed to deliver tangible benefits to both e-payment providers and users
  • The peer-to-peer system reduces the costs and administrative burden for e-wallet brands enabling them to pass on these benefits to consumers
  • It shows how centralized digital currency systems can make transactions faster, safer and more seamless in mid-sized and mega-markets

Interoperability between markets is the next realm. In February, the People’s Bank of China teamed up with its counterparts in Hong Kong, the UAE and Thailand to research a digital currency for cross-border payments. Code-named “m-CBDC Bridge”, it may be used for everything from online shopping to travel purchases and paying for overseas education.


Meanwhile, the National Bank of Cambodia is working with the Bank of Thailand on QR code standardization and with Maybank in Malaysia to study cross-border Bakong payments. The Bank of Thailand and the State Bank of Vietnam are also introducing a shared QR code payment format for tourists from each market to make purchases. Major banks in both countries are in discussions to join the e-currency project.



  • In addition to reducing the cost of international payments, CBDCs should ensure immediate settlement wherever and whenever they are used
  • Cross-border e-currencies would be transparent and traceable so that every transaction can be monitored and tracked in real-time to ensure money does not go astray
  • The rollout of CBDCs between markets is viewed as the next step to creating regionalized digital currency systems in Asia Pacific and the Middle East