Japanese FinTech company Soramitsu is exploring options for using central bank digital currencies (CBDC) and stablecoins in a cross-border payment system project for Asian countries.
The cross-border blockchain payment system being developed by Soramitsu will focus on Japan, India, China, and Southeast Asian countries. There are plans to utilize Bakong, a project of Cambodia’s CBDC, and Digital Lao Kip, Laos’ CBDC. The project also plans to use stablecoins pegged to local fiat currencies. This is reported by Nikkei.
The Bakong project was launched in 2020. It unites representatives of the public and private sectors of Cambodia, Malaysia, Thailand, and Vietnam. As of late 2022, the volume of payments processed through Bakong exceeded $15 billion, and the total number of users of digital currency amounted to 8.5 million. Bakong allows users to pay in stores or make money transfers via a mobile app using local currencies or U.S. dollars.
Soramitsu participated in the development and launch of Bakong and now plans to scale the experience to other Asian countries. In particular, it intends to launch a stablecoin exchange in Japan, which will make it possible to convert fiat currencies of different countries. For example, if a user from Thailand wants to pay for a purchase on a Japanese website, they’ll pay using Bakong denominated in U.S. dollars that will be automatically converted into a yen-denominated stablecoin.
The use of stablecoins will eliminate the use of existing interbank payment networks, speeding up transactions and reducing commission costs. Mitsubishi UFJ Trust and Banking, Vivit, and the Center for Rule-making Strategies (CRS) at Tama University are also involved in the project.
In early June 2023, Mitsubishi UFJ Financial Group (MUFG) announced the launch of the Progmat Coin platform, through which Japanese banks could issue and maintain stablecoins. Moreover, Japan recently launched a digital yen pilot program, and the Japan Credit Bureau payment system is already gearing up to issue physical cards for CBDCs.
