For quite a while, this old timer been struggling the understand the strange new terms coming in business.
Coming from a traditional banking and finance background, its mind boggling to appreciate the derivation of value from electronic mining for digital money and the mechanics of its infrastructure.
Faced with the mental roadblock of understanding blockchain, yours truly procrastinated for years by hiding behind new interests such as geopolitics, logistics and macroeconomics.
Recently a Tik Tok video of a beautiful young lady, which could either be AI or an actual person, explained the conspiracy behind Trump's issuance of Stable Coins to support the US dollar and transfer the American debt. Now stand at US$37 trillion and rising by a trillion every 100 days.
That is something of interest to yours truly and revived interest to revisit the subject with more earnest effort to learn.
More so, a recent article by Dr Liew Ping Yin in The Star on Monday talked about the need for a digital money blueprint for the region at a time yours truly is still in fear of ordering at restaurants using QR and in awe to see the use of Digital Money transaction at roadside hawkers using card or handphone.
In China, it is usual for retail sales transacted electronically, hotel check-ins and out need no human interaction, and drones deliver food or drinks right to one's location in minutes.
Beyond borders: A digital blueprint for the region
By DR LIEW PING XIN
Scholar Series
Monday, 13 Oct 2025
EVERY day, the pulse of Asean’s economy beats through millions of transactions. A Malaysian entrepreneur imports furniture from China, a café in Thailand imports coffee beans from Vietnam, a Malaysian oil and gas firm exports refined petroleum to Singapore, people buy an array of goods from sellers in China, and not forgetting the significant population of migrant workers who remit funds to support their families.
This vibrant exchange is the lifeblood of our regional prosperity. Yet beneath this bustling surface lies a hidden friction – a "tax" of time, cost and complexity.
Anyone who has sent money abroad is familiar with the process, which almost always relies on the global SWIFT (Society for Worldwide Interbank Financial Telecommunication) network.
Behind this well-known system lies a complex web of correspondent banks, which is the real source of the friction.
Once an international transfer is initiated, SWIFT messages instruct it to hop between these intermediary banks, each adding fees and days to the journey, making international transfer slow and expensive.
For the small and medium enterprises (SMEs) that form the backbone of most economies in Asean, these hurdles can be a significant barrier to growth. In an age of instant information, it is perplexing that our financial systems still operate on a timeline of days, not seconds.
For the delays and high costs plaguing international trade and the growth of SMEs, the solution emerging from several central banks offers a near-panacea.
Central bank digital currency (CBDC) is a digital form of a country’s official currency, issued and fully backed by its central bank, like Bank Negara Malaysia. While the idea of multiple countries using CBDCs to perform cross-border transactions may sound futuristic, the groundwork is already being laid by a coalition of forward-thinking nations.
Notably, the groundbreaking project known as mBridge, co-founded by the central banks of China, Hong Kong, Thailand and the United Arab Emirates, alongside the Bank for International Settlements (BIS), has already provided a glimpse of this future "landscape".
While Project Dunbar, of which Malaysia is part, proved the concept was possible, mBridge has taken the critical next step into reality. The platform has already processed real-value transactions in a successful pilot with 20 commercial banks and was elevated to a "minimum viable product" (MVP) in mid-2024, underscoring its potential to facilitate quick, low-cost cross-border payments.
These successful projects prove the technology works. What, then, is the next step? The latest consolidated data from the Asean Secretariat shows that in 2024, the total value of merchandise trade in the region was valued at about US$3.5 trillion (RM14.79 trillion), of which 21.5% was trade within the region.
Meanwhile, data from the China International Import Expo shows that in the first 10 months of 2024, bilateral trade between China and Asean stood at US$798bil (RM3.372 trillion).
While the Regional Comprehensive Economic Partnership (RCEP) laid the groundwork for an integrated Asia by dismantling many traditional trade barriers, the friction of slow and costly cross-border payments remains a significant bottleneck.
Given the immense volume of trade between Asean and China, the core of the RCEP bloc, a digital payment corridor connecting members of RCEP is not just something that is nice to have, but a strategic necessity.
Imagine a multi-CBDC platform connecting the economic powerhouses of RCEP members; it would not be a mere upgrade but rather a fundamental reimagining of how the region trades and prospers, creating a truly seamless trading bloc.
Cognisant of the complex geopolitics and great power competition, proposing a new financial architecture may raise concerns about sovereignty and over-reliance on a single power.
The greatest hurdle for such an ambitious project is not technological, but one of trust.
Widespread adoption relies on a firm belief in shared benefit, yet valid concerns over data sovereignty, surveillance and fairness could hinder participation.
Therefore, the blueprint for a digital payment corridor for RCEP members ought to be designed on three core principles.
First, there must be neutral governance to ensure that no single nation dominates. This may be done by having this CBDC payment platform overseen by an impartial body like the BIS.
Second, the purpose of this platform must be rooted in economic practicality to lubricate trade, not political alignment.
Finally, the platform must be designed with interoperability in mind.
Instead of seeking to replace existing global systems like SWIFT, the platform would create a complementary and highly efficient new "highway" for regional trade, allowing greater resilience, flexibility and more options in an unpredictable global landscape.
For the region, embracing a CBDC payment blueprint would be transformative, with benefits to be cascaded through every Asean economy, subsequently empowering SMEs and boosting the global competitiveness of major industries.
More importantly, this is a path towards greater economic sovereignty whereby the platform would reduce the region’s vulnerability to external shocks and forge its own identity.
With pioneering experience from various digital finance projects, Asean and China have the credibility and vision to initiate a conversation to discuss the potential of a CBDC payment platform for RCEP members.
By championing the blueprint, the region could emerge as a key architect of Asia’s future. In this partnership, with China as an indispensable economic anchor, a more integrated, prosperous and self-determined region can be woven together.
Let the borders on the maps remain, but the ones hindering our shared prosperity be erased.
Dr Liew Ping Xin is an Assistant Professor at Xiamen University Malaysia. The views expressed here are entirely the writer’s own.
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That's a lot to digest. Let’s unpack Bitcoin, CBDC, mBridge, and Stablecoins step by step.
🪙 1. Bitcoin
Type: Decentralized cryptocurrency
Issuer: None (no government or central authority)
Technology: Public blockchain (Bitcoin network)
Key Features:
Fully decentralized: No one “controls” Bitcoin — it runs on thousands of nodes globally.
Supply fixed at 21 million coins — cannot be printed or inflated.
Validation through mining (Proof of Work): Energy-intensive but secure.
Highly volatile in value — price fluctuates based on market demand.
Purpose: Originally meant as “peer-to-peer electronic cash,” but now used mainly as a store of value (digital gold).👉 Analogy: Bitcoin is like gold mined from a global digital field — scarce, valuable, but not controlled by anyone.
💵 2. CBDC (Central Bank Digital Currency)
Type: Digital version of a country’s official currency
Issuer: Central bank (e.g., Bank Negara Malaysia, Federal Reserve, PBOC, etc.)
Technology: Often uses permissioned blockchain or centralized database
Key Features:
Sovereign-backed: Has legal tender status like cash.
Stable value: 1 CBDC ringgit = 1 physical ringgit.
Fully regulated: Central bank can track, control, and program it.
Can replace or complement cash.
Two types:
Retail CBDC: For the public (like a digital wallet in your phone).
Wholesale CBDC: For interbank or cross-border settlements among financial institutions.👉 Analogy: CBDC is “digital cash” issued by your central bank, just like e-Ringgit.
🌐 3. mBridge
Type: Cross-border CBDC platform
Project by: BIS Innovation Hub + central banks of China (PBOC), Thailand, UAE, and Hong Kong
Goal: Enable instant, low-cost, cross-border settlements using interlinked CBDCs.
Key Features:
Each country issues its own CBDC, but they can be exchanged seamlessly via the mBridge network.
No need for SWIFT or correspondent banks.
Reduces FX and settlement risk.
Uses distributed ledger (DLT) — but only among authorized central banks and banks (not public).
Currently in pilot phase — Malaysia has shown interest in future participation.👉 Analogy: mBridge is like a multi-country digital highway allowing central banks to trade their digital currencies directly — faster than the current SWIFT system.
⚖️ 4. Stablecoin
Type: Private digital token pegged to a stable asset (usually USD or gold)
Issuer: Private companies (e.g., Tether, Circle, Binance)
Technology: Public blockchain (Ethereum, Tron, etc.)
Key Features:
Pegged value: 1 USDT ≈ 1 USD
Types of stablecoins:
Fiat-backed: Backed by real cash or bonds (e.g., USDT, USDC).
Crypto-backed: Collateralized by other crypto assets (e.g., DAI).
Algorithmic: Maintains peg through smart contracts (high risk, e.g., Terra/Luna collapse).
Useful for payments and trading in crypto markets.
Not official money, but often used as a digital equivalent of fiat currency.👉 Analogy: Stablecoins are like private digital dollars used mainly within the crypto economy — convenient but dependent on trust in the issuer.
🧩 Putting It All Together
Bitcoin started the digital currency revolution — independent of any state.
Stablecoins bridged crypto and fiat, allowing digital payments in “dollars.”
CBDCs are the state’s response — combining digital convenience with regulatory control.
mBridge is a multi-CBDC infrastructure, connecting nations for faster, secure cross-border transactions.
There are many more nomenclature to know but the digital money ecosystem is like in the diagram below:
What the heck is DEFi, tokenisation, Smart Contracts and DAOs?
On the question of how does all these differ from conventional banking system, Chat GPT explained as below:
🧱 1. Bitcoin in Simple Analogy
Imagine a global notebook — open for everyone to see, but no one can erase or fake an entry.
Every time someone sends or receives Bitcoin, it’s written in this notebook.
This notebook is copied and shared among thousands of people around the world.
Everyone checks that every new entry is valid before agreeing to add it.That global notebook is the blockchain.
And the entries inside it are the Bitcoin transactions.
So, Bitcoin is really a digital currency whose ownership is tracked and verified by thousands of computers cooperating — not by a bank.
🔗 2. Blockchain: The Technology That Keeps the Notebook Honest
Think of the blockchain as a chain of digital pages (blocks):
Each page lists recent transactions.
Every page is linked to the one before it by a cryptographic code (a “hash”).
If someone tries to alter one page, all later pages break — and everyone else’s copy will reject it.That’s why blockchain is:
Tamper-proof
Transparent
Self-verifyingIt’s not about secrecy — it’s about trust without a trusted middleman.
⛏️ 3. Mining: The “Security Guard” of the System
Now, who writes the next page in that global notebook?
That’s where miners come in.
Miners are computers competing to solve a math puzzle.
The first one to solve it earns the right to write the next page (block) on the blockchain.
As a reward for securing the system, the miner receives newly created Bitcoin — that’s how Bitcoin “is mined.”So, mining is like:
“Using computer power to prove you’ve done work, and in return, the system mints you some new coins.”
This process is called Proof of Work — it ensures honesty, but it consumes lots of electricity.
💰 4. How This Differs from Conventional Money
Aspect Conventional Money (Fiat) Bitcoin Issuer Central bank (BNM, Fed, ECB) No one — system mints coins automatically Ledger Keeper Banks and payment networks Thousands of computers (miners/nodes) Trust Model You trust the central authority You trust math + code + consensus Creation By monetary policy (printing, interest rates) By mining (mathematical proof) Control Centralized Decentralized Supply Can increase Fixed at 21 million coins So:
Bitcoin ≠ new type of currency from a bank.
It’s a new type of system for creating and verifying money — one that doesn’t depend on institutions.🪙 5. But Conceptually, It’s Still Money
Money, in any form, needs three properties:
Medium of exchange — You can trade with it.
Store of value — You can save it.
Unit of account — You can measure things with it.Bitcoin can be all three — but in practice, it’s mainly used as a store of value (digital gold), not daily spending money, because of volatility.
🧭 6. Summary Analogy
“Bitcoin is like a global, tamper-proof notebook (blockchain), maintained by volunteers (miners) who compete to write new pages in exchange for newly issued coins (Bitcoin). It replaces trust in a central bank with trust in math, code, and open consensus.”
Lets end it here before getting into a state of zouk.
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