Laos is in the pilot phase. According to reporting in Ledger Insights and the Laotian Times, the Bank of the Lao PDR established a contract with the company Soramitsu to develop a proof-of-concept CBDC. It is therefore considered to be in the pilot phase.

Laos earned a 13 out of 100 in Freedom House’s 2023 Freedom in the World report. When it comes to the issuance or use of a CBDC, however, the most relevant issues are the restrictions on free expression and the persistence of government corruption. A CBDC could worsen both issues.

Free expression is severely restricted in Laos. According to the U.S. State Department, the law in Laos “forbids slandering the state, distorting party or state policies, inciting disorder, or propagating information or opinions that weaken the state.” Furthermore, the state owns and controls most print and digital media. The U.S. State Department further reported that “The government maintained infrastructure to route all internet traffic through a single gateway, thereby enabling it to monitor and restrict content, although the government’s technical ability and human resources to monitor internet usage were limited.” Unfortunately, a CBDC could be used as another tool in this effort. Across the world, governments have often turned to freezing and seizing the money of activists, political rivals, and protestors to undermine the opposition. A CBDC would make such initiatives easier by allowing governments to take direct control of each citizen’s finances.

“Official corruption was widespread and found at all levels of government,” according to the U.S. State Department. Freedom House similarly reported that corruption was widespread and that laws “aimed at curbing graft are poorly enforced, and government regulation of virtually every facet of life provides many opportunities for bribery.” The existence of pervasive corruption is a major concern with CBDCs because it calls into question any promises that might be made by the government to limit surveillance, control, or other risks of CBDCs. Furthermore, the existence of corruption calls into question whether CBDC policies might be designed to exert political favoritism through subsidies, price controls, or other targeted restrictions.

For additional information on concerns regarding violations of human rights and civil liberties, see the following reports by Amnesty International, Financial Tyranny Index, Freedom House, Human Rights Watch, Privacy International, and the U.S. Department of State. For additional information on concerns regarding the risks of CBDCs, see the following webpage and report by the Cato Institute: The Risks of CBDCs and Central Bank Digital Currency: Assessing the Risks and Dispelling the Myths.

For additional information regarding metrics, the methodology page explains each of the data points and provides their respective sources.