Written by: Lawyer Bai Zhen, Lawyer Evan Lee
Introduction
The concept of "currency" is at the brink of a significant transformation. In the future, should money be issued by the state or left to the market?
— Perhaps, the answer is not a binary choice.
As countries accelerate the launch of "central bank digital currencies" (CBDCs), another type of currency, the "stablecoin," born from the market and recognized by law, has quietly entered the global financial system. They do not compete with each other; rather, they resemble a pair of partners that are continuously adapting. Their coexistence and collaboration will redefine every payment and transaction we make—whether in dollars, euros, or renminbi. This silent revolution is writing the rules for the currency of the future.
Stablecoins vs. CBDCs
Although stablecoins and central bank digital currencies (CBDCs) are often discussed together, their origins and missions are entirely different.
- Stablecoins are created by the market
They are created by enterprises or institutions, growing in the open soil of blockchain, inherently suitable for fast payments, cross-border transfers, and decentralized finance in the digital world. While they must also comply with regulations, they retain a certain degree of privacy and have clear advantages in speed and flexibility.
- CBDCs are state-led
Issued directly by central banks, their core mission is to maintain monetary sovereignty, enhance financial control, and serve the public interest. Each transaction is usually traceable, facilitating national regulation and monetary policy implementation. The goal of CBDCs is not to eliminate stablecoins but to provide a reliable national-level foundation for the entire digital currency system.
In fact, they are forming a relationship of division of labor and cooperation:
CBDCs focus on domestic: more suitable for domestic daily payments, policy regulation, and other "onshore" scenarios
Stablecoins focus on international: performing better in cross-border payments, crypto finance, and global asset flows in "offshore" environments.
Countries around the world, such as Singapore and Hong Kong, are experimenting with CBDCs while also issuing licenses for compliant stablecoins, promoting the coexistence and development of both.
In the future, we are likely to live in a dual-layer currency system:
State-provided digital cash serves as a stable foundation, while market-created stablecoins bring flexibility and innovation—neither replaces the other, but together they construct the payment and financial landscape of the next era.
Global CBDC Deployment Progress
Global CBDCs are undergoing a critical phase from pilot to promotion. Although early attempts have had limited effects, a new generation of digital currencies is gradually taking shape, with increasingly diverse designs and goals.
- Bahamas · Sand Dollar (launched in 2020)
As the world's first national CBDC, the "Sand Dollar" aims to enhance financial inclusivity, especially in remote islands with weak banking services. It reduces transaction costs and maintains payment functionality after natural disasters. However, user adoption has long been sluggish, accounting for a small proportion of currency circulation, and privacy concerns accompany its traceability design.
Similar situations are seen with Nigeria's eNaira and Jamaica's JAM-DEX, where early promotions did not meet expectations.
- China · Digital Renminbi
Since its pilot in 2020, the digital renminbi has seen significant recent growth:
The payment scale surged from 7.3 trillion yuan in July 2024 to 16.7 trillion yuan in November 2025, with the number of wallets increasing from 180 million to 2.25 billion.
The People's Bank of China will implement a new digital renminbi management system in January 2026, promoting its evolution from "digital cash" to "digital deposit currency." Unlike the privacy-focused European approach, e-CNY emphasizes efficiency and promotion, exploring cross-border settlement through projects like mBridge.
- European Union · Digital Euro
Currently in the preparation stage, it is intended to complement cash and bank deposits, with the earliest launch possibly in 2029 (more likely in early 2030). Its design emphasizes privacy protection and anti-counterfeiting, achieving controllable anonymity by separating identity and payment data, aiming to reduce reliance on foreign payment systems.
- United Kingdom · Digital Pound
The UK also places importance on privacy protection, explicitly prohibiting government access to personal transaction data. The personal holding limit may be set at £10,000 to £20,000, higher than the EU's €3,000, and will be open to both residents and non-residents.
- Kyrgyzstan · Digital Som
Kyrgyzstan is taking a pragmatic approach, exploring cooperation with existing crypto infrastructure (such as BNB Chain) and adopting a phased strategy:
Connect the central bank with commercial banks
Integrate the treasury for government payments
Test offline payment functionality
The country has also launched a national stablecoin, KGST, and plans to establish a cryptocurrency reserve to promote the international use of CBDCs.
Overall, the practices of various countries show that CBDCs primarily focus on financial inclusivity, payment efficiency, and monetary sovereignty, with many also promising to protect user privacy. However, as scale expands, key issues remain unresolved: can privacy protection designs hold up in actual operation? Or will they be overshadowed by stronger state monitoring demands? Future CBDCs will seek a long-term balance between efficiency, privacy, and control.
Emerging Trends and Strategic Shifts
The development of global digital currencies is entering a more pragmatic phase. Countries' strategies are no longer just "let's try," but are being advanced purposefully based on their own needs.
- United States: Promoting stablecoins, delaying digital dollar
The U.S. has clarified its direction: prioritizing the regulation of stablecoins rather than rushing to launch a central bank digital currency. The "Payment Stablecoin Transparency Act," passed by the House of Representatives in 2024, establishes a federal regulatory framework for private institutions issuing stablecoins. Meanwhile, the Federal Reserve is cautious about a retail digital dollar, stating it is "not urgent" and must be authorized by Congress. This means the U.S. is choosing to let market forces lead digital currency innovation while the state focuses on establishing rules.
- India, Brazil: Making digital currencies "programmable" to solve practical problems
Digital currencies are no longer just "electronic cash" but have become policy tools to enhance efficiency.
India's digital rupee pilot focuses on distributing government subsidies, ensuring funds reach beneficiaries directly without being misappropriated.
Brazil's Drex system is planned for launch by the end of 2025, with built-in smart contract functions that can automatically deduct taxes and execute contract terms, making CBDCs automated efficiency tools.
- Japan: "Wholesale first," upgrading from within the financial system
Unlike many countries that directly engage the public, the Bank of Japan has chosen to first introduce a "wholesale CBDC" aimed at banks and financial institutions for interbank settlements, expected to be tested in 2026-2027, while the retail version for the general public is temporarily shelved. This reflects a pragmatic approach: first upgrade the core of financial infrastructure, then consider public applications.
These examples show that the global digital currency landscape is moving towards differentiation and pragmatism—some countries are strengthening private innovation under regulation, some are utilizing programmability to achieve policy goals, and others are starting reforms from within the financial system. There will not be a unified path in the future, only paths suitable for national conditions.
Conclusion
The core question of future currency is straightforward: how can state digital currencies and market stablecoins work well together?
The world has already begun to take action:
The Bank for International Settlements' "Project Aurora" is testing how central bank digital currencies and bank digital currencies can interoperate within the same system.
Singapore's "Guardian Project" has already achieved collaborative settlement of central bank digital currencies, stablecoins, and digital assets in practical scenarios.
The goal of these efforts is simple: to prevent future money from becoming isolated islands that cannot communicate with each other. The key is that state-led digital currencies must be able to "communicate" and operate smoothly with widely used stablecoins.
Interestingly, as central bank digital currencies develop, an unexpected effect may be emerging: they may actually make decentralized stablecoins more legitimate and stable, confirming the indispensable role of stablecoins in the future financial system.
The future currency landscape is likely not about one replacing the other, but rather each having a role and collaborating together.
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