Two years ago Bank Negara Malaysia (BNM) outlined its plans for central bank digital currency (CBDC). At the time it intended to explore wholesale CBDC (wCBDC) in the short term and a general purpose retail CBDC this year. However, during a digital payments event yesterday it disclosed that the emphasis is solely on wholesale CBDC. It believes retail payments are already well served by existing systems.
Currently it is building expertise, performing preparatory work and getting to grips with the technology.
“If we were to issue wholesale CBDC in the future, we would know what it takes and what policy implications we need to bear in mind,” the central bank said, as reported by the Sun Malaysia.
The central bank envisages a wholesale CBDc as supporting interbank settlement for tokenized deposits both domestically and for cross border payments. International payments have been of interest for some time. BNM was a participant in Singapore’s multi-CBDC Project Dunbar, and is an observer of mBridge, the cross border CBDC project that is currently at the minimum viable product stage. Active mBridge participants include the central banks of China, Hong Kong, Saudi Arabia, Thailand and the UAE.
Despite its preparations, the central bank has no immediate plans to issue one. It will continue working on wCBDC and DLT during 2024-25. Several Asian economies are currently exploring a wholesale CBDC to support tokenized deposits. They include the central banks of Hong Kong, Korea, Singapore and Taiwan.
Ledger Insights recently released a report exploring tokenized deposits and bank stablecoins, highlighting more than 70 initiatives.
