rsions of CBDCs, and some like China, have even started implementing them for local commercial initiatives. So far, it’s been all about creating cashless societies and eliminating unbanked communities. The story so far Just to recap, there are two types of CBDCs, wholesale and retail. Wholesale CBDCs are primarily used by financial institutions, while retail CBDCs are used by consumers and businesses, much like physical forms of currency. According to the Atlantic Council’s CBDC tracker, 105 countries, representing over 95 per cent of global GDP are exploring CBDCs. Ten countries have launched a fully digital currency, with China’s pilot set to expand in 2023. Of the G7 economies, the US and the UK are the furthest behind on CBDC development. Nineteen of the G20 countries are exploring a CBDC, with 16 already in development in the pilot stage. This includes South Korea, Japan, India and Russia. Thailand, China, Hong Kong and the UAE are working on a project for CBDC exchanges among their jurisdictions – dubbed the ‘mBridge’ – while Australia, Singapore, Malaysia and South Africa are working on their own version – ‘Project Dunbar’ – for CBDC settlements. There are also multiple CBDC projects in the works in Switzerland, Canada, the UK and France. APAC’s CBDC adventure According to a recent report from Deloitte, the appetite for CBDCs in APAC is mainly due to the outsized impact of high remittance costs, significant cross-border trading fees, limited financial inclusion and the over-reliance on the US dollar. China’s pilot of a digital currency electronic payment (DCEP) system started back in mid-2020, and it runs on private blockchain infrastructure, allowing the central bank and government to retain control over the currency. A recent International Monetary Fund (IMF) report on CBDCs in APAC highlighted the fact that China, Singapore and Hong Kong are frontrunners even in the global context, thanks to their technological advantage and relatively mature private sector digital payment platforms. Currently, only two countries in the APAC region have the legal authority to issue CBDCs. This includes China, where the law was revised to allow the issuance of CBDCs, and the Philippines, where the central bank has the authority to own and operate it. In India, Macao and Vietnam, laws are being changed to grant central banks this authority. In addition, three countries (Korea, Sri Lanka, and Thailand) have plans underway to provide the legal authority for CBDC issuance to central banks. According to a white paper from the Central Bank of Indonesia, its maiden CBDC will have a wholesale and retail version, and will have use cases for web3 and the metaverse.  Digital penetration in Indonesia is quite impressive. The country is home to 370 million mobile customers, 204 million internet users and around 191 million active social media users. Around 90 million people are unbanked, and this is where CBDCs come into play. The future outlook Meanwhile in Australia, the Reserve Bank of Australia released a white paper back in September on its pilot CBDC, dubbed the eAUD. It describes a joint research project by the Digital Finance Cooperative Research Centre (DFCRC) in conjunction with the Reserve Bank of Australia (RBA). The DFCRC is a 10-year, $180 million research program funded by industry partners, universities and the Australian Government, through the Cooperative Research Centres Program. Interestingly, RBA’s assistant governor Brad Jones recently told Reuters that the bank is sceptical of the usefulness of a retail CBDC in a market that already has a highly developed payments system. Jones said the RBA’s pilot eAUD programme with the DFCRC has attracted more than 140 use case proposals from around 80 entities, well above initial expectations. “The use cases span everything from e-commerce payments, to offline payments, government payments, and the trading and settlement of tokenised assets,” said Jones, who heads the RBA’s financial system unit. Reuters noted that interested entities ranged from large banks, financial market infrastructure providers and consultancies, to small digital asset firms and fintechs.  But Jones believes that for a country with an already advanced payments system and easy access to cash such as Australia, it is not clear what problem a CBDC would be solving.  Furthermore, he feels it is possible that household holdings of eAUD at the RBA would end up replacing deposits held by commercial banks, sapping their ability to lend. He also warned that it could also lead to faster runs on the banking system, since if households were to lose confidence in a bank, they could switch to CBDC en masse with the stroke of a keyboard.