Two Paths, One Region: The Split in Asia-Pacific’s Digital Money Strategy
The Asia-Pacific region is becoming a fascinating laboratory for the future of money, but it’s following two distinct paths. Rather than a unified approach, we’re seeing a clear divergence as some governments champion state-backed digital currencies while others place their bets on regulated private-sector innovation. This split is creating a fragmented digital monetary landscape that will fundamentally shape how financial transactions are conducted across the region.
On one side, we see the state-led model in full force. China is the standout example, with its digital yuan, also known as the e-CNY, already in active public use for everyday payments. Hong Kong is following a similar path, diligently advancing its e-HKD pilot program. In contrast, other major economies have taken a different route. South Korea made a significant policy shift in June 2025, halting its central bank digital currency (CBDC) project and instead directing its banks to develop Korean won-backed stablecoins. Australia is also leaning toward regulating private stablecoins pegged to its national currency, creating a clear alternative to the state-centric model.
Perhaps the most intriguing case is Kazakhstan, which is pursuing a hybrid strategy. The National Bank of Kazakhstan is simultaneously developing the digital tenge while a private, tenge-pegged stablecoin called Evo (KZTE) operates in parallel on the Solana blockchain with Mastercard integration. Singapore is also exploring both avenues, continuing its own CBDC trials while allowing regulated stablecoins to circulate through its banking system.
What This Means for the Future of Finance
For users and corporate treasurers, the distinction between these two forms of digital money is critical. A CBDC is essentially a direct digital liability of the central bank, a digital version of cash. A regulated stablecoin, however, is a private token that maintains its value by being backed one-for-one with traditional currency held in reserve. As the IMF has pointed out, it’s crucial to remember that “a stablecoin does not carry central bank backing,” which means users must carefully vet the custodians and reserve audits behind them.
This regulatory diversity has practical consequences, fragmenting liquidity and trading pairs across the region. The great real-time experiment unfolding in Asia-Pacific will ultimately determine which form of digital currency gains the widest adoption. The winner will be decided by how regulators handle the critical issues of reserves, liabilities, and licensing throughout the rest of 2025 and beyond.
