Crypto & Digital Currencies
June 3, 2025
James Hurren explores what early CBDC deployments across Asia, the Caribbean, and Europe reveal about usage, adoption, and the future of cross-border digital money.
Central bank digital currencies (CBDCs) have rapidly evolved from theoretical concepts into live pilots and national deployments. With more than 130 jurisdictions now researching or developing CBDCs—ranging from early-stage exploration to live deployments—global momentum is steadily building. From Asia to the Caribbean and Europe, central banks are grappling with how to digitise public money while preserving trust, utility, and sovereignty.
Beneath this shared ambition lies a complex and varied landscape. Usage patterns differ, technological approaches diverge, and key challenges—from privacy concerns to merchant adoption—remain unresolved. Early deployments across Asia, the Caribbean, and Europe reveal how people are using CBDCs, how merchants are responding, and what this means for cross-border payments in an increasingly interconnected world.
Historically, consumer-facing banks have treated payments as an extension of banking: an account-based system where intermediaries authorise and validate each transaction. However, Payments involve both transmitting and representing value, typically as claims or liabilities recorded within financial systems. While CBDCs can streamline value transfer, they remain a form of stored value backed by the central bank.
This misconception has shaped many CBDC proposals, which tend to replicate traditional account-based structures under the control of central authorities or delegated intermediaries. In doing so, they risk missing the core innovation that digital money promises: the ability to transfer value directly, securely, and potentially without the need for intermediaries.
By leaning heavily on custodial models and surveillance-driven frameworks, many central banks are limiting the utility and inclusiveness of CBDCs. There’s a growing realisation that successful CBDC deployment must be rooted in new digital-first thinking, not a digital clone of old banking systems.
Cross-border payments remain one of the most promising areas for CBDC impact, as well as being one of the most technically and politically complex. Beyond reducing friction in transactions, cross-border CBDCs have the potential to influence global liquidity and FX flows, though their longer-term effects on international monetary policy remain the subject of ongoing research and debate. According to Sudeepta Das, director of Cohesive Architecture, “In addition to currency dominance and exchange rate, cross-border CBDC will introduce enhanced liquidity in the international market, impacting how central banks hold their reserves.”
Das added that “improved liquidity due to streamlined settlement processes will reduce the need for intermediary currencies and lower the transaction costs. Additionally, an influx of CBDC usage across the globe could encourage central banks to adjust their foreign exchange reserves to include more CBDCs, influencing global capital flows and the traditional dynamics of reserve currency utilisation.”
“In addition to currency dominance and exchange rate, cross-border CBDC will introduce enhanced liquidity in the international market, impacting how central banks hold their reserves.”
– Sudeepta Das, director of Cohesive Architecture
Projects like Jura (led by the BIS Innovation Hub, Banque de France, Swiss Centre, Swiss National Bank, and a private sector consortium) and Dunbar (involving Australia, Malaysia, Singapore, and South Africa) have demonstrated that wholesale central bank digital currencies (CBDCs) can enhance the settlement of foreign exchange and securities transactions. These projects leveraged distributed ledger technology (DLT) to settle trades more quickly and securely, using delivery-versus-payment (DvP) mechanisms that reduce counterparty risk. As Nilixa Devlukia, CEO at Payments Solved, observes, these projects illustrate “the benefits of shared infrastructure,” adding that “technical standards are beneficial to building interoperable CBDCs that function seamlessly across borders and jurisdictions.”
Beyond technical proof points, these initiatives underscore the need for global interoperability. Each country tends to design central bank digital currencies (CBDCs) for domestic purposes, which risks creating digital islands—isolated networks that can’t communicate with each other. Solutions like Swift’s CBDC connector, tested with 38 financial institutions, aim to bridge these silos using a hub-and-spoke model that interlinks various CBDC networks and even traditional fiat systems.
In Europe, the drive for CBDCs is also motivated by strategic autonomy. The dominance of US-based networks, such as Visa and Mastercard, in the EU’s retail payments has raised concerns about sovereignty and data control. The European Central Bank’s digital euro initiative seeks to reduce this dependency. Still, critics argue that recreating intermediated services under state control won’t solve the underlying issues of privacy, inclusion, and user agency.
“Technical standards are beneficial to building interoperable CBDCs that function seamlessly across borders and jurisdictions.”
– Nilixa Devlukia, CEO at Payments Solved
One of the defining debates in CBDC design is whether digital money must be held in accounts or whether it can function more like digital cash, a bearer instrument stored in a digital wallet.
Most central banks have defaulted to account-based models, influenced by legacy regulatory frameworks and assumptions about anti-money laundering (AML) and know-your-customer (KYC) requirements. However, this has sparked criticism that these systems strip users of financial autonomy and introduce unnecessary friction.
Tokens, by contrast, represent value independently of identity. This distinction is critical in cash-reliant economies across the Caribbean and parts of Asia. Digital tokens could extend payment services to the unbanked without requiring full account registration or constant online access.
Natalie Lewis, partner, fintech, market infrastructure & payments, at Travers Smith, notes the importance of accessibility and design simplicity, especially in underbanked regions: “The key point is that for CBDCs to aid financial inclusion, they need to be a digital equivalent to cash. That means it is easily accessible at various levels of technology and can also be accessed offline.”
“The key point is that for CBDCs to aid financial inclusion, they need to be a digital equivalent to cash. That means it is easily accessible at various levels of technology and can also be accessed offline.”
– Natalie Lewis, partner, fintech, market infrastructure & payments, at Travers Smith
Offline payments—a key feature in Europe’s digital euro discussions—are also part of this debate. Yet designing for offline-first use cases introduces technical complexity and requires careful consideration to balance user demand with practicality, though recent prototypes show that offline functionality can be achieved on standard smartphones without specialised hardware.
Flexibility is also crucial when it comes to custody. Hugo Remi, CEO at Cardaq, emphasises that allowing users to hold CBDCs outside a custodial account is vital for innovation and infrastructure development. As he explains, “if everything were handled in a centralised way, people would be scared to use this financial instrument,” warning that such an approach could “build borders between consumers, fintech companies and the regulator.” Digital money can be programmable, secure, and compliant without defaulting to full custodial control or turning every wallet into a surveillance device.
For CBDCs to succeed, merchants must accept them, and consumers must be willing to use them—a reality often overlooked in state-led initiatives that are preoccupied with infrastructure and policy. As Devlukia notes, driving merchant adoption depends on practical features such as “low acceptance fees, offline capability, instant settlement, and simple integration with existing devices,” all of which must be delivered alongside “seamless customer journeys to enhance the user experience.”
Yet, merchants, especially small businesses, face real hurdles. Many CBDC designs demand certified hardware, regulated wallet providers, or integration with legacy financial systems—requirements that can deter participation, especially within informal economies.
On the consumer side, privacy concerns loom large. CBDCs that allow authorities to track money not only when it moves but also when it remains stationary undermine trust. Unlike cash, which offers anonymity by default, many proposed CBDCs give users little assurance that their financial behaviour won’t be logged, analysed, or restricted.
“In the UK, the Bank of England has said that privacy must be written into the enabling legislation. People won’t use CBDCs if they believe it means ‘Big Brother’ will be watching their spending,” notes Lewis, underscoring the importance of legal safeguards.
Regarding the need for central banks to balance AML/KYC compliance with user privacy, Remi adds: “The central bank (government) has only one choice—to outsource those functions to third parties, like banks, financial institutions and other regulated entities. Otherwise, people would treat it as a threat and would refuse to use this financial instrument.”
“The central bank (government) has only one choice—to outsource those functions to third parties, like banks, financial institutions and other regulated entities.”
– Hugo Remi, CEO at Cardaq
Adoption will depend on simplicity, usability, and control. Here, telecom operators and fintech platforms may offer a more viable distribution model than traditional banks, especially in regions where smartphone penetration outpaces financial access.
Asia holds some of the most advanced CBDC pilots. The People’s Bank of China’s e-CNY and the Monetary Authority of Singapore’s projects are technically robust, but still domestically focused. The region offers models of efficient rollout and infrastructure readiness, but has yet to tackle international interoperability at scale.
Projects like DCash, deployed by the Eastern Caribbean Central Bank, aim to enhance financial inclusion. However, technical setbacks (including a two-month service outage) exposed architectural and governance challenges in DCash’s implementation, underscoring the importance of robust operational resilience for centralised digital infrastructures.
Motivated by concerns over sovereignty and market independence, the EU’s digital euro project is politically significant. While its aim to reduce reliance on non-European payment networks is clear, critics warn that without a stronger focus on user-controlled, privacy-first designs, it risks recreating the inefficiencies of traditional banking systems. Lewis notes that while shared platforms between central and commercial banks “offered real potential to streamline cross-border payments,” many central banks remain hesitant. “We are still a way from central banks being comfortable with losing some control over their ledgers—especially for retail CBDCs,” she adds
Based on the lessons from early movers, payment leaders and central banks should:
On whether telecom operators and fintech companies should play a greater role in CBDC distribution and infrastructure, Remi stated: “Definitely yes, this financial instrument should be available for any financial institution, and it might be a great idea to give access to the telecom companies as well.”
CBDCs are not merely a technical upgrade but a political and economic statement about who controls money in the digital age. As early adopters in Asia, the Caribbean, and Europe have demonstrated, the success of a CBDC depends not only on its infrastructure but also on whether it empowers people to use money freely, securely, and privately.
If designed thoughtfully, CBDCs could reduce inefficiencies, improve cross-border trade, and promote inclusive financial systems. But if they simply replicate the limitations of the past—account-based control, rigid intermediaries, or surveillance-first mindsets—they will fail to realise their transformative potential.
The time to rethink money is now; the industry’s early movers have given us a head start.
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