It was a busy week at the Singapore Fintech Festival 2025 (SFF 2025) when it kicked off on 12 November 2025. To no one’s surprise, Artificial Intelligence (AI) seemed to be the key theme at the event.
In addition, there has been a lot of talk about stablecoins as well as CBDCs – short for central bank digital currencies – and what roles they might play in our financial future.
This was explored in some detail via panel discussions throughout the SFF 2025, but what should we know about both CBDCs and stablecoins and how they’re changing the world of finance and, more specifically, payments?
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What Are CBDCs?
CBDCs are the digital form of sovereign currency, issued directly by central banks. They aren’t new money, but just a new format for the money that already exists.
Many countries have spent years researching them, and the view across central banks now is that the technology is no longer the barrier. The real questions revolve around design choices, governance, and whether the public sees enough value to adopt them.
South Korea piloted its own CBDC, for example, involved 80,000 real users and several major banks. The project demonstrated that CBDCs can operate at scale, settle transactions instantly, and integrate with tokenised deposits.
But even with that success, South Korea’s central bank concluded that the biggest value lies at the wholesale level rather than at the retail level. The country’s existing domestic payments system is already fast, cheap, and inclusive, so a retail CBDC didn’t create benefits that would justify the policy and communication challenges that come with it.
Australia reached a similar conclusion. After testing a general-purpose CBDC, the central bank shifted its focus to how digital money interacts with tokenised assets.
The more interesting part of the CBDC conversation today is how it could support the financial system behind the scenes, especially when assets, money, and settlement all move onto distributed ledgers.
One of the panels, centred on CBDCs at the SFF 2025, focused on how CBDCs can support instant, risk-free settlement and provide a stable foundation for programmable financial services.
But there was also general consensus among the panelists that retail CBDCs may not be universally useful. The value depends heavily on whether a country needs it to solve issues like financial inclusion or inefficient payment rails.
Even so, CBDC development keeps coming back to trust. Cash works everywhere, requires no device or network, preserves privacy and remains the most inclusive form of money.
Translating those qualities into digital form raises difficult design questions, especially when it involves anonymity, offline capability, and public confidence that the central bank isn’t monitoring every transaction (i.e. privacy concerns).
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Stablecoins: How Private Money Filled The Gap
While central banks debate CBDC design, stablecoins grew from the opposite direction. They came not from policy but from demand.
Traders, cryptocurrency users, and eventually everyday consumers needed a way to move money instantly across platforms, borders and time zones without relying on the traditional banking system. Stablecoins filled that gap with remarkable speed.
The core idea is simple. A stablecoin is a digital token whose value is meant to stay stable, usually by being backed with assets like cash, short-term government bills or bank deposits. In fact, 99% of stablecoins in circulation today are actually backed by US Dollar-denominated assets.
This stability makes them usable for payments rather than speculation, and their blockchain-native format lets people send them globally in seconds.
That simplicity hides a huge range of variation. Some stablecoins are fully backed by highly liquid reserves and operate under clear regulatory frameworks. Others operate in much greyer territory, promising stability without always proving what sits behind them.
This inconsistency is a major concern for policymakers. If stablecoins are to act as a widespread form of digital cash, users need to trust the issuer, the reserves, the governance structure and the jurisdiction overseeing it.
Yet, the private sector has succeeded where traditional payments infrastructure has struggled. Stablecoins make it possible for someone in Singapore to send digital dollars to someone in Argentina within minutes. They allow platforms to settle global transactions without intermediaries.
Their popularity illustrates something central banks can’t ignore and that’s the simple fact that people will gravitate toward whatever solves their problems most effectively. Even regulators who criticise stablecoins recognise that they have improved cross-border payments in ways the traditional system has failed to deliver.
At the SFF 2025 panel on CBDCs, the concern wasn’t that stablecoins exist but that too many will emerge across different chains, platforms and legal frameworks.
A fragmented universe of private currencies can create systemic risks, or at minimum, make the monetary system harder to navigate. The question is how they will end up fitting in alongside CBDCs and tokenised deposits.
The Key Difference Between CBDCs and Stablecoins
The most important difference lies in who issues the money and what it represents. CBDCs are essentially public money, backed by a central bank and carrying the same legal status as cash.
On the other hand, stablecoins are private money. Their stability depends entirely on the issuer’s reserves and credibility (think of it as a digital credit rating).
CBDCs are being designed to improve the core infrastructure of national payments and settlement systems. Stablecoins have emerged, though, to meet the practical needs of users who want speed, interoperability and cross-border functionality that the traditional financial payments system couldn’t provide.
A Future Where Both CBDCs & Stablecoins Co-Exist
The narrative that CBDCs will replace stablecoins no longer holds as firmly. Central banks now acknowledge that different forms of digital money will coexist, much like cash, bank deposits and e-wallet balances coexist today. The more interesting question is how they will interact.
The panelists repeatedly highlighted the importance of bridging mechanisms that let assets and money move across different ledgers smoothly. Without those bridges, the digital economy risks becoming more fragmented rather than more efficient.
The future is unlikely to be a single global ledger or a single superior form of digital money. Instead, it will be a network of interconnected systems, each designed for different purposes but held together by agreed standards and trust frameworks.
At the end of the day, what matters is whether each form of digital money can deliver trust, privacy, resilience and convenience.
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