Southeast Asia’s Cautious Approach to Retail CBDCs

Southeast Asia, home to 11 countries and around 700 million people, is widely recognized as a global leader in digital finance. Markets such as Singapore, Indonesia, the Philippines, Thailand, and Vietnam have embraced mobile wallets, digital banks, cryptocurrencies, and CBDC experiments, often outpacing the rest of the world in fintech adoption.

Retail CBDCs Remain Elusive

Despite this digital sophistication, most Southeast Asian countries have avoided implementing retail central bank digital currencies (CBDCs). Cambodia’s Project Bakong is frequently cited as an exception, yet according to Chea Serey, assistant governor of the National Bank of Cambodia, Bakong “is not a digital currency.” The system relies on tokenized commercial bank deposits rather than direct liabilities of the central bank, distinguishing it from a true CBDC.

Wholesale CBDCs Gain Traction, but Gradually

Some countries in the region are exploring wholesale CBDCs, though progress is cautious. Initial enthusiasm for retail CBDCs has cooled, reflected in the OMFIF Future of Payments 2024 survey, where only 13% of central bank respondents now see CBDC networks as the most promising approach for cross-border payments—down from 31% the previous year. High costs remain a key challenge, and central banks differ widely on how best to implement such systems.

Concerns Slowing Retail CBDC Adoption

Central bankers cite concerns over financial stability, the risk of bank runs, monetary policy implications, privacy, and competition with private banks and cryptocurrencies. For nations with advanced digital payment networks, the incremental benefits of retail CBDCs are often unclear. Singapore and Thailand, for example, have provided instant cross-border retail payments since 2021 via government-backed PayNow and PromptPay networks, and are actively experimenting with stablecoins in cross-border settlements.

Singapore Advances Wholesale CBDC Trials

Singapore is moving forward with a wholesale CBDC pilot. At the 2025 Singapore FinTech Festival, MAS managing director Chia Der Jiun revealed that DBS, OCBC, and UOB had successfully completed interbank overnight lending using Singapore dollar wholesale CBDC for settlement. MAS plans to next trial the issuance of tokenized MAS Bills to Primary Dealers, also settled with CBDC, marking a careful but meaningful step toward integrating digital currency into institutional financial operations.