tl;dr
China’s digital yuan (e-CNY) is reported to be linked with over a dozen countries in Southeast Asia and the Middle East, including potentially Hong Kong, Thailand, UAE, and Saudi Arabia, though no official confirmation has been made by the People’s Bank of China (PBoC). These countries are part of t...
Recent reports suggest that China may have linked its digital yuan (e-CNY) Central Bank Digital Currency (CBDC) to 10 ASEAN countries and 6 Middle Eastern nations, although no official confirmation has been released by the People’s Bank of China (PBoC). These partnerships are rumored to involve key members of the mBridge project, including Hong Kong, Thailand, the UAE, and Saudi Arabia, aiming to facilitate cross-border payments through CBDCs.
However, skepticism remains as the Bank for International Settlements (BIS) has exited the mBridge project, citing concerns over geopolitical influence and the risk of the system being dominated by sanctioned countries, such as Russia, a potential BRICS leader. Despite Western fears that the digital yuan could challenge the U.S. dollar’s global supremacy, Chinese officials maintain that the initiative is focused solely on domestic payment efficiency and future readiness for digital economies. Former PBoC deputy governor Li Bo has emphasized that internationalization of the renminbi is a natural progression, not an attempt to replace the U.S. dollar.
Meanwhile, Pakistan is actively advancing its digital financial sector. The Federal Investigation Agency (FIA), the country's top security and counter-intelligence body, has proposed a new regulatory framework for digital assets aligned with Financial Action Task Force (FATF) guidelines. This framework targets anti-money laundering, terrorism financing, consumer protection, and prudential standards across digital asset platforms such as exchanges and wallets. The proposal is open for public and industry feedback before parliamentary review and phased implementation expected next year.
Pakistan’s digital asset ecosystem currently boasts around 15 million holders but struggles without comprehensive regulation, which local industry groups argue is necessary to foster growth and enable local Virtual Asset Service Providers (VASPs) to compete globally. FIA Director Sumera Azam highlights the framework as a “paradigm shift” balancing technological innovation with national security imperatives.
These developments underscore the dynamic and complex landscape of CBDCs and digital asset regulation across Asia and the Middle East, reflecting a broader trend toward digital finance integration amid geopolitical and economic tensions.