The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or
policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of
Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this
paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be
consistent with ADB official terms.

Central Bank Digital Currency and

Fintech in Asia

Dr. Bihong Huang

Research economist, ADBI
29 Nov 2019

Copyright © 2019 by Asian Development Bank Institute. All rights reserved.

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Fintech and regulation
Fintech is broadly defined as advanced technology to improve and
automate delivery and use of financial services to consumers and
businesses.

The rise of financial technology is transforming the way firms and

households participate in the financial markets, as well as the way they live.

Digital finance provides new financial products and financial services, which
can lead to greater financial inclusion and provide more convenient access to
finance in a lower cost.

At the same time, the fintech revolution brings with it a host of potential new
risks to financial system stability and challenges for consumer protection. Its
broad scope affects central banks, regulatory and supervisory authorities
alike.

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Payment and central bank digital currency
• In some Asian economies, payments have been largely moved to
non-cash modes, heightening the need for a regulatory response
by the relevant authorities.

• Shall central banks should develop their own digital currencies?

• Should central bank digital currencies be made available to retail

depositors or only in the interbank (wholesale) market?

• Would this put central banks in direct competition with private

banks for retail deposits?

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A unique book
The present volume is quite remarkable in that officials
and researchers from a broad swath of international
financial institutions (ADBI, BIS, IMF) and Asian central
banks have come forth with their perspectives on the
regulation of fintech in general, and the future of
central bank digital currencies in particular.

It should serve as an excellent introduction and a

valuable supplement to the major policy issues in this
rapidly developing area for policy makers, academics,
think tank researchers, and students.
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Part 1 Theoretical discussion and overview
This part covers the theory of central bank digital currencies,
regulatory aspects, economic digitalization, and the role of
fintech for financial inclusion.
• Chapter 2 “Money and Central Bank Digital Currency” by Sayuri Shirai
overviews the concepts and features of central bank money and private
sector money, and summarizes the central bank digital currency
proposals into four categories according to their underlying technology
and usage.

• Chapter 3 “Regulating Fintech: Objectives, Principles and Practices” by

Marlene Amstad provides an overview and key elements on the ongoing
policy debate of whether and how to regulate fintech. It identifies three
core objectives, three guiding principles, and three regulatory practices
for Fintech regulation.

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Part 1 Theoretical discussion and
overview – continued
• Chapter 4 “SME Finance in Asia: Recent Innovations in Fintech Credit,
Trade Finance and Beyond” by Giulio Cornelli, Vukile Davison, Jon
Frost, Leonardo Gambacorta, and Kyoko Oishi reviews the recent trends
in developing alternative finance for small and medium-sized enterprises
(SMEs) in Asia.
• Chapter 5 “The Digital Revolution in Asia and Its Macroeconomic Effects ”
by Sally Chen and her colleagues in the IMF presents an overview of
Asia’s digital landscape, depicts the relationship between the traditional
finance and digital finance, and analyzes the macroeconomic implications
of digitalization.
• Chapter 6 “Money and Finance in the Digital Age: Some New
Developments” by Feng Zhu discusses fintech credit and digital
currencies by reviewing a number of key issues in these two main areas
of the ongoing fintech revolution.

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Part 2 Case Studies
• Chapter 7 “Fintech and Central Bank Digital Currency in Australia” by
David Emery describes Australia’s fast real-time retail payments system
called the New Payments Platform which was launched in February
2018 by a consortium of 13 financial institutions including the Reserve
Bank of Australia (RBA).
• Chapter 8 “Regulating FinTech for Sustainable Development in China” by
Zhong Xu and Ruihui Xu reviews regulations and supportive approaches
of the PRC government for ensuring sustainable development of fintech.
The regulations overviewed in this chapter cover the fields of P2P lending,
third-party payment, crypto assets, etc.
• Chapter 9 “Fintech Development in Hong Kong, China “ by Yvonne Tsui,
Hongyi Chen, Chris Ip and Bernia Lee sheds light on the accelerated
fintech development of Hong Kong, China, including Open Application
Programming Interface (API) for banks, Faster Payment System (FPS)
and Common QR Code Standard for retail payments, trade finance, and
virtual banking.

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 Part 2 Case Studies – continued
• Chapter 10 “Fintech Development and Regulatory Frameworks in Indonesia” by
Sukarela Batunanggar outlines the fintech landscape and discusses the regulatory
framework adopted by the Indonesia Financial Services Authority (OJK)
• Chapter 11 “Project Stella and Impacts of Fintech on Financial Infrastructures in
Japan” by Michinobu Kishi summarizes the Bank of Japan’s (BOJ) ongoing Project
Stella, a joint research project with the European Central Bank (ECB) to study the
possible use of distributed ledger technology for the financial market structure.
• Chapter 12 “Fintech, Crypto-assets, and Central Bank Digital Currency in Korea”
by Byoung-ki Kim, Ohik Kim and Jongik Park focuses on the Republic of Korea’s
fintech development, the growing popularity of crypto assets, and the Bank of
Korea’s current stance concerning central bank digital currency.
• Chapter 13 “Project Inthanon and Project DLT Scripless Bond” by Chananun
Supadulya, Kasidit Tansanguan, Wipat Wattanasiriwiroj and Kantitat
Areechitranusorn introduces the two initiatives on DLT launched by the Bank of
Thailand in 2018, including the Project Inthanon and Project DLT scripless bond.

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Thank you very much!