In Brief:
- The central bank of Laos plans to issue its own digital currency
- The study will be conducted with the support of a fintech startup based in Japan.
- Digital currency will help policymakers to gather data about the economy
Laos is working with a Japanese fintech company to develop its own digital currency in the near future. The study by Laos’ central bank and Soramitsu will begin this month. They will explore the possibility of launching a digital version of Laos’s currency Lao Kip.
According to Nikkei Asia, The Bank of the Lao People’s Democratic Republic will launch a study focused on the development of the CBDC. Laos plans to issue a digital currency with support from Tokyo-based Soramitsu.Â
Laos recently signed a memorandum with the Japan International Cooperation Agency to study the development of a central bank digital currency.
Using blockchain technology, Soramitsu, a Japanese fintech company, has previously helped Cambodia develop its Bakong digital payments system, reducing its reliance on the US dollar.
Policymakers would have easier access to data about the economy using a digital version of the KIP, such as the amount of money in circulation.
Many Asian emerging-market economies have long used the U.S. dollar as their primary currency, whether officially or informally. Nevertheless, Asian countries with high trade volumes with China have been increasingly concerned with maintaining yuan parity since the global financial crisis.
Last month, the Central bank of Australia, South Africa, Malaysia, and Singapore announced a joint initiative to test cross-border central bank digital currencies (CBDC) payments. The banks would test whether it allows if the transactions are carried out more easily and cheaply.
