Global Experts Explore CBDC Trends, Future, and Current Development

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The growing momentum behind central bank digital currencies (CBDCs) is reshaping the global financial landscape. In a recent episode of the OMFIF podcast—a platform dedicated to analyzing international macroeconomic trends, investment policies, and emerging technological shifts—Chris Ostrowski, Commercial Director at OMFIF based in London, hosted Vijak Sethaput from the Bank of Thailand and Sky Guo, Project Lead at Cypherium, for an in-depth discussion on blockchain technology and the evolving role of CBDCs.

Cypherium is a hybrid blockchain platform recognized for its early collaboration with global enterprises like Google and Randstad in developing practical blockchain applications. With innovations such as decentralized identity protocols and a permissionless consensus system integrated with smart contract capabilities, Cypherium provides a robust technical foundation for future CBDC integration. This dialogue offers valuable insights into how policymakers and technologists are aligning visions for the next generation of digital finance.

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The Turning Point: From Bitcoin Volatility to CBDC Vision

Chris Ostrowski: Let’s begin by exploring your personal journeys into the world of CBDCs. Sky, when did you first realize that central bank digital currencies weren’t just a technical experiment, but potentially a transformative force in monetary history?

Sky Guo: Back in 2017, I read an article about how blockchain could enable real-world CBDC deployment. At that time, Bitcoin surged from below $10,000 to nearly $23,000—only to crash down to around $3,000 shortly after. This extreme volatility made it clear that while cryptocurrencies captured attention, they lacked the stability required for everyday money. That’s when I realized: what we needed wasn’t decentralized speculation, but digitally efficient, centrally issued currency—stable, fast, and secure. CBDCs emerged as the logical evolution.

Thailand’s Inthanon Project: A National Infrastructure Experiment

Chris: Fascinating. So Bitcoin’s instability was your catalyst. Vijak, what sparked Thailand’s interest in CBDCs?

Vijak Sethaput: Also in 2017, we began seeing the broader potential of blockchain beyond speculation. The Thai government recognized that a national digital currency could modernize our financial infrastructure. That led to Project Inthanon, launched in 2018 in collaboration with the Bank of Thailand and several commercial banks.

Our goal was to build a blockchain-based real-time gross settlement (RTGS) system. We discovered three key benefits:

However, challenges remain—particularly around scalability, privacy, and regulatory alignment.

Blockchain’s Role in Solving Core Financial Challenges

Chris: Sky, do you believe blockchain can truly address the issues Vijak mentioned?

Sky Guo: Absolutely. Blockchain meets all critical requirements for CBDCs: access control, accuracy, speed, functionality, and privacy. As a distributed ledger, it enables near-instant issuance and transfer of digital currency across borders. More importantly, smart contracts unlock automation and programmability.

For example, imagine preventing misuse of public funds. During the pandemic, a Florida official used government relief money—intended for struggling workers—to buy a Lamborghini. With smart contracts, funds can be programmed for specific uses only. If the recipient tries to spend them outside approved categories, the transaction fails automatically.

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Smart Contracts and Real-World Asset Tokenization

Beyond compliance, smart contracts open doors to DeFi (Decentralized Finance) models—open financial systems where lending, borrowing, and interest payments occur autonomously via code.

Governments can leverage this by tokenizing real-world assets like real estate or equities. These digital representations can back CBDCs or serve as collateral, enhancing liquidity and stimulating economic growth.

Vijak Sethaput: We’ve already tested this in Project Inthanon. We simulated bond lifecycles using smart contracts—from issuance to coupon payments and repo transactions. We also automated interbank transfers and customer-to-bank settlements. However, one major hurdle remains: KYC (Know Your Customer) compliance.

Solving Identity and Privacy in Digital Currency Systems

Chris: Sky, how can central banks implement smart contracts without compromising user privacy or regulatory requirements?

Sky Guo: The solution lies in decentralized digital identity. Instead of storing personal data on-chain—which poses privacy risks—we embed cryptographic identifiers into transactions. These act as proof of origin while keeping sensitive information off the blockchain.

We’ve developed a solution using Ranstan and Google Cloud-based digital identity, where smart contracts verify digital signatures without exposing raw data. Personal information is stored separately in secure environments, linked only through encrypted references.

This layered approach ensures compliance with KYC regulations while preserving user privacy—a balance essential for public trust.

Cross-Border Interoperability: The Inthanon-LionRock Initiative

Chris: Vijak, why did Thailand choose to partner with Hong Kong’s Monetary Authority (HKMA)?

Vijak Sethaput: Because cross-border payments are a shared challenge. That’s why we launched the Inthanon-LionRock Project—a joint initiative to explore interoperability between Thailand’s and Hong Kong’s RTGS systems using blockchain.

The goal? Enable direct cross-jurisdictional transfers without intermediaries—reducing cost, time, and counterparty risk.

Sky Guo: We proposed a corridor network model, linking the two blockchains directly. For users, it’s seamless: all they need is a device—phone, tablet, or computer—with access to a blockchain-enabled app. No third parties involved. Instant settlement achieved.

The Power of Interoperability: A Key Technical Advantage

Chris: Sky, what do you see as blockchain’s most powerful attribute in this context?

Sky Guo: Without question—interoperability. Today’s CBDCs face a fragmentation problem: some are retail-focused (like China’s DCEP), others wholesale (like France and Thailand). For global adoption, they must communicate seamlessly.

Cypherium addresses this with instant settlement and a high-performance Byzantine Fault Tolerant (BFT) consensus algorithm capable of processing thousands of transactions per second. This isn’t just about speed—it’s about building bridges between disparate systems.

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Legal and Macroeconomic Implications of CBDC Adoption

Chris: Vijak, what has surprised you most about this journey?

Vijak Sethaput: How deeply interconnected this technology is with other domains—not just payments, but foreign exchange markets, monetary policy, legal frameworks, and macroeconomic stability. We’re not just digitizing money; we’re rethinking financial architecture.

Challenges Ahead: Technology Maturity and Public Perception

Despite progress, hurdles remain:

As Sky noted, if CBDCs rely on outdated systems like SWIFT for cross-border transfers—requiring manual input of CPN codes—they’ll inherit legacy inefficiencies. True transformation requires new infrastructure, purpose-built for digital currency.

Frequently Asked Questions (FAQ)

Q: What is a central bank digital currency (CBDC)?
A: A CBDC is a digital form of a country’s fiat currency issued and regulated by its central bank. Unlike cryptocurrencies, it’s centralized and designed for stability and legal tender status.

Q: How does blockchain improve cross-border payments?
A: Blockchain eliminates intermediaries, reduces settlement time from days to seconds, lowers transaction costs, and increases transparency through immutable ledgers.

Q: Can CBDCs protect user privacy?
A: Yes—with proper design. Personal data doesn’t need to be stored on-chain. Instead, cryptographic identifiers link to off-chain verified identities, balancing privacy with regulatory compliance.

Q: What role do smart contracts play in CBDCs?
A: Smart contracts automate financial processes—such as conditional payments or compliance checks—reducing fraud, increasing efficiency, and enabling programmable money.

Q: Why is interoperability important for CBDCs?
A: Without interoperability, each country’s CBDC operates in isolation. For global trade and finance to benefit, these systems must seamlessly interact—just like the internet connects different networks.

Q: Are any countries already using CBDCs?
A: Several are in advanced stages: China has piloted its digital yuan (DCEP), Nigeria launched the eNaira, and Sweden is testing the e-krona. Many others, including Thailand and France, are running pilot programs.

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