Overview Of Digital Currency Part 4: Outstanding Examples Related To Digital Currency Of Central Bank Digital Currency (CBDC)

9 October, 2021

According to PriceWaterHouseCooper (2021), in the current world, many nations have begun to research and deploy Digital currency by Central bank digital currency (CBDC); even, some nations have launched the practical use of digital currency, listing as: Bahamas – the leading nation in bringing digital currency into action; Cambodian State Bank with Bakong Project – one inter-bank payment system in accordance with blockchain foundation and distributed ledger technology and so on. Especially, some nations have been researching CBDC current classification in the long-term period with the purpose of assisting inter-bank payment system.  


Bahamas, the leading country in implementing Digital currency issued by Central Bank digital currency (CBDC), tested Sand Dollar – a digital name for Bahamas Dollar – in December 2019. Only a short time later, this digital currency was officially released into circulation in October 2020 through local Authorized Financial Institutions (AFI). People can install E-wallets on personal mobile phones or via physical payment cards so as to receive digital money. All transaction data are stored daily so that Bahamian government can bring in more effective micro-financial policies. Bahamian government introduced Sand Dollar currency with the aim of: (i) improving efficiency of Bahamian payment system, (ii) improving local residents’ access to finance, (iii) enhancing prevention of money laundering and corruption.

Bahamas deploys Digital currency named Sand Dollar

Bahamian residents’ E-wallet is classified into 2 types as below:

Type 1: $500-storage-limit, and $1.500-value-transaction per month, Type 1 requires neither clear identification nor bank account for use.

Type 2: $8.000-storage-limit, and $10.000-value-transaction per month, Type 2 requires both clear identification and bank account for use.


Cambodian National Bank has been conducting research on digital currency since 2016 with Bakong project – an interbank payment system based on blockchain and distributed ledger technology (DLT). Bakong name is taken from the ancient architectural symbol in Cambodian culture. This project is researched to establish prototype platforms within 2 years; after that, to test the integration into Cambodian infrastructure system before being used. Cambodian government called on a number of financial institutions and banks to participate in the testing trial and validation towards Bakong system in 2018.

Campuchia is making efforts in eliminating ‘dollarization’ into national digital currency

Bakong project applies DLT technology platform by Hyperledger Iroha. Hyperledger Iroha is a branch in an open-source project built by global developers to improve blockchain technology applicability in practice. Hyperledger Iroha thrives in Japan, consulted by SORAMITSU in building algorithms for security betterment and blockchain application in accordance with the needs of Cambodian market. Bakong project uses this platform to test both retail and wholesale CBDCs in Cambodian market.

Bakong is a system of decentralized ledgers which contains data and connects all transactions in Cambodian economy until the present time. When a Cambodian resident transfers money from a bank account to a Bakong account, no fee is charged and vice versa. This amazingly comprehensive payment connectivity boosts Bakong implementation in practice to become easy and brings many practical benefits to Cambodian residents. Modern blockchain technology helps ensure safety, fast transaction processing speed, cost saving and information security for traders.


China, one of the world’s largest economies, has been the earliest nation that implements digital currency into Chinese economy. Digial Yuan (NDT) Project was first announced by China in 2014; and officially, in April 2020, put into trial circulation in a number of major cities. Digital currency application in the economy is considered by Chinese government to support Chinese residents’ payments, enhancing the efficiency of financial markets, strengthening the local currency and improving international capabilities of Yuan currency.

PBOC has begun to research digital Yuan currency since 2014

That Digital Yuan currency is designed with special features that can be traded online or offline aims at replacing paper money and coins in China nation. The fact that this digital currency is issued through intermediaries as commercial banks means that Central Bank of China will issue money to commercial banks, after that, the commercial banking system will forward it to end users. Therefore, the central bank will collect money movement data to better monitor monetary behavior in the economy.

Digital yuan project has been issued with a supply of more than 2 billion yuan (equivalent to $300 million) in circulation in a number of major Chinese cities: listing as: Shenzhen, Suzhou, Baoding, Shenzhen and Chengdu. Chinese government expects the digital yuan to become more widely used during Winter Olympics time held in Beijing in 2022. Although official information on plans to roll out Digital yuan has not been announced, Chinese government expects Digital yuan to become more widely used. Chinese government has clearly shown its determination to digitize the economy and make the renminbi one of the standard currencies in international payments.

During the testing phase, Central Bank of China conducted a random selection through a lottery to select 750,000 users to test E-wallets and spend services using this digital currency. Whether Digital yuan’s technical foundation is blockchain technology or not is still a mystery because no information has been released by People’s Bank of China. Digital yuan system will ensure a mode of ‘controlled anonymity’.

Other countries

In September 2018, Central Bank of Ukraine (NBU) conducted an experiment on a CBDC coin, called E-hryvnia. The total supply of issued digital coins is 5,443 E-hryvnia coins, the technical infrastructure used is a blockchain platform with decentralized ledger data, a supervised digital accounting mechanism. Along with testing this CBDC operation, the government is also conducting research on the effects of this currency on the financial stability of this country. By December 2018, the pilot project had been completed and the government promised to continue researching and issuing CBDC coins in the future. The recognition by Government of Ukraine shows that cryptocurrencies can work stably and not negatively affect the economy in terms of price issues and financial stability of Ukraine.

Uruguay conducted CBDC trial in November 2017 as E-peso. The pilot project lasted 6 months with 20 million E-peso issued to more than 10,000 mobile phone users. The government limits individual wallets to $30,000 and business wallets to $200,000. Uruguayan CBDC is only used for a few selected shops and businesses as well as the entire infrastructure that is peer-to-peer. That E-peso payment system can be performed without an Internet connection is one notable difference of this coin. Uruguayan government claims that E-peso remains ‘anonymous’ but can be ‘traceable’ to avoid money laundering or crime. However, the pilot by Central Bank of Uruguay did not involve commercial banks; therefore, CBDC impacts on Uruguayan economy could not be assessed.

Ecuador was the first country to conduct a CBDC trial in 2014 under the name ‘dinero electrónico’ (DE). Ecuadorian government issues these digital currencies first; a year later, software can be downloaded from Central bank developed by a state-owned telecommunications company to use on mobile phones. DE helps Ecuador nation save more than 3 million USD per year on old currency printing and supports the anti-dollarization of Ecuadorian economy after a long time of being dependent on US dollar since the beginning of the year 2000. However, Ecuadorian project was restricted when the State monopolized DE payment system, which led to the pilot being stopped indefinitely in 2018. In 2019, a new currency of the commercial banking system, called Bimo, was officially recognized by Government in official payment transactions with the potential to become a complete CBDC.

Besides the above countries, many other countries have also implemented and piloted CBDC currency in a narrow range of economies; listing as: Sweden, Korea, Turkey and so on. Among them, some countries have been conducting researches on ‘wholesale’ CBDC money for quite a long time to serve the Interbank payment system: listing as: Hong Kong, Japan, Thailand, Singapore, Canada, UK, France, South Africa and some other countries in Europe. These countries take a rather conservative approach to CBDC implementation towards their economies. However, from the actions of these central banks, CBDC process is gradually taking shape.

Please view the full research article “Digital currency and new global currency system” by author group here.

Author group: Dr. Lê Đạt Chí, MA. Trương Trung Tài, MA. Nguyễn Triều Đông, (Finance Faculty – Business School UEH).

This writing in Distributing Series of research and knowledge applied from UEH, we would like to invite our dear readers to follow Knowledge Newsletter, Volume 10, An overview of digital currency – Part 5: Private digital currency Diem.

News, Photos: Author group, Marketing – Communication Department.