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Japanese fintech to launch cross-border CBDC in Asia
Japanese fintech firm, Soramitsu, is developing a cross-border payment in Asia, utilizing CBDCs and blockchain.
Soramitsu, a Japanese fintech firm, is working on developing a cross-border payment framework for Asian countries, incorporating the central bank digital currency (CBDC) of Cambodia. This CBDC is part of an evolving international transaction network in the region.
Cambodia’s CBDC, Bakong, and the Digital Lao Kip from Laos are two Asian CBDCs that Soramitsu has used. Bakong’s implementation in digital payments can be observed in its QR code-based transactions that reach countries like Malaysia, Thailand, and Vietnam.
By the end of 2022, Bakong had 8.5 million users and a transaction volume of $15 billion, showcasing its adoption rate.
Soramitsu has further plans on its roadmap, which include exploring collaborations with countries like India and China. They also want to integrate their home country, Japan, into this emerging payment .
Soramitsu intends to establish an exchange in Japan focusing on stablecoins, digital currencies tethered to traditional legal tender. Essentially, if a consumer in Thailand wants to purchase from a Japanese online store, the transaction might use the Bakong, which would then be converted into a stablecoin linked to the yen.
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CBDC: gateway to state control or monetary innovation? While exchanging stablecoins within a single blockchain is technologically direct, complexities emerge when multiple blockchains come into play. In partnership with entities such as Mitsubishi UFJ Trust and Banking, Soramitsu is developing an efficient exchange infrastructure to address these intricacies.
Recent updates to Japan’s payment regulations allow banks to issue stablecoins. As a result, numerous local startups and banks are preparing to introduce yen-backed stablecoins soon.
Soramitsu has collaborated with Vivit and Tama University Center for Rule-making Strategies to achieve their objective. Together, they aim to connect Japanese enterprises with the Southeast Asian market, a region characterized by high smartphone usage and limited traditional banking services.
Read more:
Exploring the early CBDC adoption results beyond the hype