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Tag: digital currency

  • 3 Southeast Asian Central Banks Partner on Cross-Border Digital Money Initiative

    3 Southeast Asian Central Banks Partner on Cross-Border Digital Money Initiative

    Central banks in Singapore, Malaysia and Thailand have formed a cross-border digital money partnership to standardise commercial acceptance and settlement across the three jurisdictions.

    The Monetary Authority of Singapore led the rollout of the initiative, operating under the name BLOOM, which stands for Borderless, Liquid, Open, Online, Multi-currency.

    Announced last Friday, the central banks of Malaysia and Thailand entered the programme as official policymaker participants alongside Singapore’s monetary authority. Commercial banks, merchant payment networks and financial technology providers across all 3 markets will work directly with the regulators to establish standard operating practices for multi-currency transactions.

    Setting Terms for Regional Digital Settlement

    Work under the framework focuses on defining how distinct forms of digital money can clear, settle and exchange without institutional friction across borders. Participating teams will address three concrete tracks: cross-border acceptance and settlement mechanisms, technical interoperability between domestic payment systems, and programmable transaction controls.

    Implications for Cross-Border Merchants

    For cross-border retailers and online marketplace platforms operating across the Singapore-Malaysia-Thailand corridor, disparate clearing mechanisms create structural working capital delays. Wholesale clearing channels often demand days to convert and settle local balances.

    By establishing common protocols for programmable and digital currencies, central banks are testing ways to bypass fragmented correspondent banking relationships. The operational risk sits in technical compliance, where commercial operators must adapt their checkout infrastructure to central bank specifications while managing distinct domestic regulatory requirements across each border.

    The Trajectory of Southeast Asian Payments

    The BLOOM framework builds on existing cross-border links established across the region over recent years. While those early retail integrations connected consumer smartphone apps for tourist spending, they relied on conventional commercial bank rails behind the scenes.

    BLOOM shifts the focus from consumer front-ends to the core settlement layer, evaluating programmable digital tokens to automate settlement conditions directly. The test phase will determine operational guidelines, with the participating regulators due to outline technical specifications and initial private-sector pilot results in upcoming joint releases.

  • DBS Survey Finds 88% of Businesses Use or Pilot Tokenised Money

    DBS Survey Finds 88% of Businesses Use or Pilot Tokenised Money

    Corporate adoption of tokenised money reached 88 per cent among large enterprises deploying or piloting digital asset tools across 11 key markets, according to findings released on October 28 by Singapore lender DBS Bank.

    The study surveyed 422 senior business and treasury leaders from companies generating more than US$500 million in annual revenue across Australia, China, Germany, the UK, and the US.

    Roughly two-thirds of surveyed companies have already put tokenised money to work at scale or introduced it across selected regional operations. Businesses are relying on digital assets to manage cross-border corporate liquidity and open settlement corridors into new geographic markets without relying on traditional correspondent banking rails.

    Stablecoins take the lead in corporate liquidity

    Stablecoins emerged as the single most adopted tokenised instrument in the survey, with 63 per cent of corporate leaders reporting active use. Tokenised commercial bank deposits followed at 53 per cent, while tokenised money market funds accounted for 52 per cent.

    Treasury teams prefer stablecoins because they settle instantly across fragmented networks without waiting for clearing house cut-offs. Lim Soon Chong, group head of global transaction services at DBS Bank, pointed to friction in legacy payment processing as a prime driver.

    “Stablecoins, as you know, offer better fungibility across payment intermediaries, not just across banks. They are less cumbersome from a permissioning standpoint,” he said.

    The speed of liquidity rebalancing gives commercial operators direct control over working capital. Cross-border wholesalers and supply chain aggregators save days of trapped cash during supplier invoicing and customs clearance runs.

    Southeast Asia leads target markets for business expansion

    Corporate expansion strategies remain centred on Asia-Pacific corridors, with Southeast Asia ranking as the top destination for cross-border capital deployment. Australia and New Zealand took the second position for corporate entry, followed closely by India in third place.

    Consumer goods distributors, e-commerce platforms, and logistics operators moving capital across these growth corridors face sharp exchange costs and clearing delays under bilateral banking rails. Tokenised rails allow international firms to bypass batch clearing, running continuous payouts directly to supplier balance sheets across Association of Southeast Asian Nations economies.

    The operational shift changes how multinational retailers fund local inventory. Instead of pre-funding merchant accounts days ahead through intermediary banks, corporate treasurers can keep capital centralised until invoices come due at the point of fulfillment.

    Trade settlement tilts toward the Chinese yuan

    Bilateral payment preferences are shifting alongside tokenisation infrastructure. More than half of corporate executives surveyed in both Australia and the UK stated they are considering settling cross-border trade in Chinese yuan over the next one to two years.

    Recent appreciation in the currency has prompted Chinese exporters to offer improved commercial pricing and credit terms for contracts denominated directly in renminbi rather than US dollars. Exporters in China are actively shifting counterparty terms to avoid foreign exchange volatility on their own domestic books.

    The commercial incentives align with Beijing’s ongoing campaign to widen international adoption of its sovereign currency across key trade routes. Western and regional importers buying goods manufactured in China gain direct supplier discounts by settling directly in yuan, reducing exposure to dollar conversion fees.

    Earlier pilots set the stage for commercial rollouts

    The survey data shows those experiments have moved out of development labs and directly into commercial treasury departments. Multinationals with annual turnover exceeding half a billion dollars are no longer waiting for universal public central bank digital currencies, turning instead to commercially available stablecoins and deposit tokens to fix immediate cash drags.

    Corporate treasurers now face clear execution milestones as Australia and UK companies finalize contract reviews for yuan-denominated billing cycles scheduled across the coming 12 to 24 months.

  • Bank of Thailand Proposes Strict One-to-One Reserves for Baht Stablecoins

    Bank of Thailand Proposes Strict One-to-One Reserves for Baht Stablecoins

    The Bank of Thailand proposed draft rules requiring baht-denominated stablecoin issuers to back tokens 1:1 with bank deposits and prohibited them from paying interest to holders.

    Redemptions must clear within one business day under the central bank’s consultation paper, stripping out speculative yield features to force issuers into functioning strictly as payment tools.

    Cash Reserves and Redemption Rules

    Under the initial phase of the framework, issuers must place all reserve assets in commercial bank accounts. The central bank stated that each issued token requires a full baht counterpart on deposit to guarantee liquidity when users exit to fiat currency.

    Later stages could permit issuers to diversify backing into other high-quality liquid assets such as short-dated government securities. For now, capital remains locked exclusively in standard accounts.

    Holders will receive zero yield. The paper bars issuers from providing direct or indirect incentives, interest payments, or returns calculated against holding duration or token balances.

    The role of the digital payment tool should be clearly distinguished from financial products that offer returns on holdings. The restriction aims to ensure that THB stablecoins function as a means of payment rather than a savings or investment product, the consultation paper stated.

    Licensing Under the Finance Ministry

    The central bank recommended that Thailand’s Ministry of Finance formally designate token issuers and custodial wallet operators as payment service businesses. That designation pulls every participant directly beneath central bank supervision before they can launch commercial services.

    Regulators also want the legal authority to cap the total number of licensed issuers operating in Thailand. Fragmented liquidity across dozens of corporate tokens would weaken settlement stability and leave merchant gateways juggling incompatible digital currencies.

    Wallet providers and token operators must install anti-money laundering controls alongside know-your-customer and know-your-merchant checks. Systems must flag suspicious flows and maintain cyber safeguards equivalent to retail banking networks.

    Automated Settlements and Retail Reality

    Commercial banks and payment aggregators already run PromptPay across Thailand, processing high-volume consumer payments at near-zero fees. A baht stablecoin does not exist to replace that daily point-of-sale infrastructure.

    The central bank pointed instead toward programmable commerce built on distributed ledgers. Smart contracts could automate escrow payments, releasing merchant disbursements only after a freight carrier confirms final delivery of goods.

    For enterprise treasuries, programmable tokens eliminate multi-day corporate settlement delays without taking on foreign-exchange volatility. Yet by banning interest, regulators have eliminated the primary mechanism decentralized finance protocols use to attract commercial liquidity.

    What to Watch Next

    Thailand is choosing a defensive stance that protects retail deposits rather than testing financial engineering.

    The policy document follows years of steady payments modernization in Thailand, moving from paper cash to QR codes under state supervision. Permitting private corporate tokens without strict balance sheet anchors would reverse that consumer protection stance.

    The Bank of Thailand is now gathering public industry feedback on the consultation paper before submitting formal statutory recommendations to the Ministry of Finance.

  • Crypto Rumbles Central Bank Sovereignty

    Crypto Rumbles Central Bank Sovereignty

    The private sector has long driven innovation on digital currencies but as fintech’s plans became more powerful, central banks sprang to attention. Their main concern? Keeping monetary policy in their purview.

    The most tantalizing tales in cryptocurrencies this year weren’t written by Libra or bitcoin, but by national or supranational projects like the digital euro. While investors raced to get in on bitcoin’s record-smashing highs, the government projects warrant a closer look.

    What central banks are trying to do is replace the storage carrier of money with a new one – cloud instead of long-play (LP), so to speak. The aim is to kill several birds with one stone.

    The first is to stave off a private sector-led attack on central bank sovereignty. The second is enabling efficiencies in the financial system, and the third is to lay a foundation for seamless oversight of monetary transactions.

    Taken in turn: a central bank ensures financial stability while overseeing systemically-relevant market infrastructure. To hand over a central instrument in its arsenal is to jeopardize its own mandate. Replacing a country’s own currency with another – which frequently happens in unstable countries, where dollars effectively become the leading currency – is a good example, or when a privately-controlled alternative takes over for reasons of efficiency.

    Admittedly, crypto is far from this scenario, but the thought experiment is a worthwhile one. We need to assume that multinational companies like Amazon or Alibaba will in future control and executive an enormous portion of private consumption: they own the value chain, from manufacturer to end consumer. They are intimately familiar with customer needs and aren’t shy about cultivating the data with the help of artificial intelligence.

    The next logical step in cementing this position is to introduce their own currency. This would dramatically simplify the purchasing process as well as create a vast common currency area spanning producer, commercial dealer, suppliers, to consumers.

    None of this is a problem as long as employees are paid in U.S. dollars, euros, or krona and use a major currency to buy a trading one. But if they are, for example, partly paid in Amazonas or Alibabas, central banks cede part of their authority to the private sector. The initial hostile official response to Libra is the logical consequence of this.

    The Swiss central bank’s «Project Helvetia» as part of the BIS’ innovation hub sidesteps the first question in favor of tackling the second, central digital revolution issue. Traditional banks are still grappling with the conversion to digital banking: continually under siege from newer upstarts without any historical baggage and far zippier organizations.

    The Swiss National Bank’s digital franc is meant to enable efficiency gains and simplify monetary transactions. This is a much more defensive strategy than other central banks have elected – notably the European Central Bank, Sweden’s Riksbank, or the People’s Bank of China – but the pragmatic approach fits the Swiss system of thinking well.

    In lockstep with infrastructure provider SIX, which belongs to the banks, genuine and measurable advances would represent a great step towards a digital future. The Swiss stock exchange operator plans to go live with its digital asset trading venue, SDX, next year. A digital Swiss franc would suit the SNB’s financial intermediaries perfectly.

    Switzerland is hardly ready for the third and conclusive step: a digital version of cash is being actively discussed elsewhere (namely in Sweden and China). Some aspects of digital money – efficiency versus cash and crucially, the traceability of transactions – are too tempting to resist.

    Of course, all types of criminals could be disrupted in their activities with such a step. But the accompanying supervision of citizens contradicts Switzerland’s understanding of government and privacy – and should be rejected. The complete replacement of cash in Europe and the U.S. isn’t on the horizon either for the same reasons, even if digital money eventually will find a niche besides paper.

    Despite the rapid advancement of the topic in recent months, we’re still at the dawn of developments. 2021 is sure to bring promising new developments, and the ECB is likely to devote considerable resources to rolling out a digital euro (or ultimately spike the project).

    In Switzerland, SDX and «Project Helvetia» are poised to take their next steps. The U.S. has been noticeably absent in the discussion, though January’s change in administration may mark a new tack in digital assets.

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  • Australian, New Zealand central banks say no plans to issue official digital currencies

    Australian, New Zealand central banks say no plans to issue official digital currencies

    The central banks of Australia and New Zealand ruled out today the notion that they would issue official cryptocurrencies anytime soon, warning the potential damage to their banking systems could outweigh the benefits.

    Tony Richards, head of the Reserve Bank of Australia’s (RBA) payments policy, said that bitcoin and other cryptocurrencies had not proven their worth as reliable stores of value or means of payment because of their volatility and vulnerability to hacking.

    “Nine years after its launch and about five years since it entered the public consciousness, bitcoin continues to have structural flaws that make it unsuitable for many uses, many of which stem from its inefficient verification process,” he said in the text of a speech given in Sydney.

    Given their low usage in Australia, cryptocurrencies were unlikely to have any significant impact on the RBA’s oversight of monetary policy and the banking system, he said.

    The RBA had no plan for the time being to adopt any new electronic form of money for households, he added.

    “Based on our interactions with our counterparts in other countries, it is also not front of mind for most other advanced economy central banks,” Richards said.

    The Reserve Bank of New Zealand (RBNZ) also said that while it was open to exploring new technology, it was unclear whether a central bank digital currency will bring conclusive benefits.

    While digital currencies could make distribution of money safer and cheaper, they could increase the likelihood of bank runs during periods of financial instability, said RBNZ deputy governor Geoff Bascand.

    That was because in times of financial stress, depositors could easily and remotely transfer large deposit holdings to a central bank digital currency, he said.

    “A breakdown in the financial system can cause enormous economic and social harm. We could not issue a digital currency if it might undermine financial stability,” Bascand said in the text of a speech at an Auckland conference.

    “The payments industry is dynamic, which is good. But the Reserve Bank must be a considered prospector in the exploration for digital currency benefits – we have New Zealand’s currency and financial system at stake.”

    Wild swings in the price of cryptocurrencies, and fears they may be used for illicit activities such as tax evasion, have drawn the attention of global policymakers.

    Finance leaders of the Group of 20 major economies agreed in March to open the door to regulating the booming industry, though they have only just started adopting individual rules due to the difficulty of agreeing on a multilateral approach.

    Most central banks are wary of embracing cryptocurrencies and say they have no plans to issue their own digital money with the exception of Sweden, where the shift away from the use of cash is significantly more advanced than in other countries.

    Bitcoin prices dropped their lowest in more than four months on Friday, continuing a downtrend driven by authorities’ measures to impose tighter regulation on cryptocurrencies.

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  • Digital currency is inevitable, likely to overtake fiat Bank of China admits

    Digital currency is inevitable, likely to overtake fiat Bank of China admits

    Zhou Xiaochuan, the central bank’s governor, made these certain remarks relating to cryptocurrencies at this year’s National People’s Congress During his press conference, he admitted the fast growth of cryptocurrencies and spoke on how it could be better used in the country. Nevertheless, the bank is not comfortable with digital currencies like the Bitcoin and is slowly finding ways in which to regulate them as they believe digital currency is inevitable.

    The Governor of the central bank made it clear during the congress that digital currency is inevitable and have a higher likelihood to replace paper money. He further noted that for effective regulations to be availed, new technologies and regional trials have to be conducted.

    “The central bank is researching digital currency. Issuing a digital currency does not depend on a technology application but on the ability to reduce costs and improve the convenience of retail payments.” Referring to Bitcoin’s extensive growth, the vice governor advised that “speculative products” should be closely monitored.

    Although harsh on the current cryptocurrencies, in mid-2017, the People’s Bank of China established a digital currency research institute which was tasked at developing a state-controlled digital currency to cater for an increased demand of a digital currency.

    The governor’s remarks are similar to the ones issued by the same bank in early January 2016. In its earlier remarks, the central bank stated that they were looking into issuing their own digital currency in the soonest time possible.

    Although China’s economy is not yet conversant with digital money it’s seeking the help of the industry to carry out research and development of a digital currency. Zhou noted that the latest crackdown on the cryptocurrencies like Bitcoin is meant to strengthen investor and consumer education and protection.

    This follows the government’s move to further extend its whip on those dealing with cryptocurrencies. It even forced a popular social media platform, WeChat, to close down and closely monitor all accounts that are dealing with cryptocurrency. Especially those belonging to cryptocurrency exchanges.

    This made it hard for mainland residents who traded in cryptocurrencies and used WeChat as a tool of trade. Investors were forced to rely on offshore accounts. Those who didn’t have offshore accounts preferred over-the-counter to continue with the cryptocurrency trading.

    Nevertheless, with the government admitting digital currency is inevitable, it is just a matter of time before we start hearing some good news again from a one-time crypto “leading” nation.

    Do you think the PBoC and the government will eventually issue their own state-backed digital currency or will they adopt the already available digital currencies?

    Let us know your thoughts in the comments section

     

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