Original Authors: Bai ZhenJen, Evan Lee
Introduction
The concept of "money" is standing at the brink of a monumental shift. Should the money of the future be issued by the state, or left to the market?
—Perhaps, the answer isn't an either/or choice.
As countries accelerate the launch of "Central Bank Digital Currencies" (CBDCs), another form of money—"stablecoins," born from the market yet legally recognized—has quietly entered the global financial system. They do not resemble opponents but rather, a pair of partners constantly磨合 (adjusting and磨合). Their coexistence and collaboration will redefine every payment we make, every transaction we conduct—whether in dollars, euros, or renminbi. This silent revolution is writing the rules for the future of money.
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
Created by enterprises or institutions, they grow in the open soil of blockchain, inherently suited for fast payments, cross-border transfers, and decentralized finance in the digital world. Although subject to regulation, they still retain a certain degree of privacy space, offering clear advantages in speed and flexibility.
- CBDCs are state-led
Issued directly by the central bank, their core mission is to maintain monetary sovereignty, enhance financial control, and serve the public interest. Every transaction is typically traceable, facilitating state regulation and monetary policy implementation. The goal of a CBDC is not to淘汰 (phase out) stablecoins, but to provide a reliable national-level foundation for the entire digital currency system.
In fact, they are forming a division of labor and collaboration relationship:
- CBDCs focus inward: More suitable for "domestic" scenarios like daily payments and policy adjustments.
- Stablecoins focus outward: Excel in "offshore" environments like cross-border payments, crypto finance, and global asset flows.
Around the world, places like Singapore and Hong Kong, China, are experimenting with CBDCs while also issuing licenses to compliant stablecoins, promoting the parallel development of both.
In the future, we are likely to live in a two-tiered monetary system:
State-provided digital cash serves as a stable foundation, while market-created stablecoins bring flexibility and innovation—they are not about one replacing the other, but about共同构建 (co-building) the next era's payment and financial landscape.
Global CBDC Deployment Progress
Global CBDCs are undergoing a critical phase from pilot to promotion. Although early attempts had limited effects, a new generation of digital currencies is gradually scaling, with increasingly diverse designs and objectives.
- The Bahamas · Sand Dollar (Launched 2020)
As the world's first nationwide CBDC, the "Sand Dollar" aims to enhance financial inclusion, especially in remote islands with weak banking services. It reduces transaction costs and maintains payment functionality after natural disasters. However, user adoption rates have remained low for a long time, accounting for a very small share of the money supply, and privacy concerns exist alongside its traceable design.
Similar situations are seen with Nigeria's eNaira and Jamaica's JAM-DEX, where early promotions fell short of expectations.
- China · Digital Yuan (e-CNY)
Since its pilot in 2020, the digital yuan has shown significant recent growth:
Payment scale surged from 7.3 trillion yuan in July 2024 to 16.7 trillion yuan in November 2025, while the number of wallets skyrocketed from 180 million to 2.25 billion.
The People's Bank of China will implement a new e-CNY management system in January 2026, promoting its evolution from "digital cash" to "digital deposit currency." Unlike the European path focusing on privacy, e-CNY emphasizes efficiency and promotion, and is exploring cross-border settlement through projects like mBridge.
- European Union · Digital Euro
Currently in the preparation phase, intended as a complement to cash and bank deposits, potentially launching最早 (earliest) in 2029 (more likely 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 emphasizes privacy protection, explicitly prohibiting government access to personal transaction data. The individual holding limit might be set at £10,000-20,000, higher than the EU's €3,000, and will be open to both residents and non-residents.
- Kyrgyzstan · Digital Som
Adopting a pragmatic path, exploring cooperation with existing crypto infrastructure (like BNB Chain), and using a phased approach:
1. Connect the central bank and commercial banks
2. Integrate the treasury for government payments
3. Test offline payment functionality
The country also introduced a national stablecoin, KGST, and plans to establish cryptocurrency reserves to promote the international use of its CBDC.
Looking at global practices, most CBDCs have financial inclusion, payment efficiency, and monetary sovereignty as core objectives, with many also承诺 (promising) user privacy protection. However, as scale increases, key questions remain unresolved: In actual operation, can the privacy protection design be maintained? Or will it be overridden by stronger state surveillance needs? Future CBDCs will need to find 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 stage. National strategies are no longer just "testing the waters but are advancing targetedly according to their own needs.
- United States: Prioritizing Stablecoins, Pausing the Digital Dollar
The US has clarified its direction: prioritize regulating stablecoins rather than rushing to launch a central bank digital currency. The Clarity for Payment Stablecoins Act passed by the House of Representatives in 2024 established a federal regulatory framework for private stablecoin issuance. 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 US is choosing to let market forces lead digital currency innovation, with the state focusing on establishing rules.
- India, Brazil: Making Digital Currency "Programmable" to Solve Practical Problems
Digital currency is no longer just "electronic cash" but a policy tool to enhance efficiency.
India's digital rupee pilot focuses on distributing government subsidies, ensuring funds reach beneficiaries directly and are not misused.
Brazil's Drex system, planned for launch by the end of 2025, has built-in smart contract functionality, enabling automatic tax deductions, contract execution, making the CBDC an automated efficiency tool.
- Japan: "Wholesale First," Upgrading from Within the Financial System
Unlike many countries starting directly with the public, the Bank of Japan has chosen to first launch a "wholesale CBDC" for interbank settlement, with testing expected in 2026-2027, while the retail version for the general public is temporarily shelved. This reflects a pragmatic approach: first upgrade the core of the financial infrastructure, then consider public applications.
These examples show the global digital currency landscape is moving towards differentiation and pragmatism—some countries strengthen regulated private innovation, some use programmability to achieve policy goals, and others start变革 (transformation) from within the financial system. There will be no single path, only paths suited to national conditions.
Conclusion
The core question for the future of money is straightforward: how can the state's digital currency and the market's stablecoins coordinate effectively?
Global action has already begun:
- The Bank for International Settlements' "Project Agora" is testing how central bank digital currencies and commercial bank digital currencies can interoperate within the same system.
- Singapore's "Project Guardian" has already achieved协同结算 (collaborative settlement) in practical scenarios involving central bank digital currencies, stablecoins, and digital assets.
The goal of these efforts is simple: to prevent the money of the future from fragmenting into isolated islands that cannot communicate. The key is that state-led digital currencies must be able to smoothly "dialogue" and operate together with widely used stablecoins.
Interestingly, as CBDCs develop, an unexpected effect may be emerging: they are反而 (conversely) making decentralized stablecoins more legitimate and stable, confirming their indispensable role in the future financial system.
The future monetary landscape will likely not be about one replacing the other, but about each playing its role and collaborating together.
