Central bank digital currency CBDC - a new approach
Many central banks wanted to implement a digital currency (CBDC). They blindly followed the suggestion that CBDC should be based on blockchain. That was a big mistake.

There is no need for CBDC to follow blockchain (which was the platform used for cryptocurrency). If they adopt a traditional (i.e. non blockchain) platform, they would be able to implement CBDC more quickly.

Blockchain is expensive to implement and to process. It also complicated and requires special devices, which is not available for ordinary people.

Google told me that the most widespread use of CBDC is in Nigeria. My Nigerian friend told me that the eNaira is hardly used.

China has tried to implement eCNY for several years. It also did not take off. The eCNY was officially launched at the winter olympics in early 2022. There was no further report of any wider rollout. I think the eCNY, based on blockchain technology, was not well used.

If the policy makers in the central banks, including MAS in Singapore, realize their mistake and adopt CBDC based on a traditional platform, they are more likely to succeed.

There are still many challenges to be overcome, but moving out of blockchain is the first step.

Tan Kin Lian

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