Thailand-based SCB has introduced a stablecoin-based solution for cross-border payments following the completion of regulatory sandbox trials.
The initiative was carried out in collaboration with SCB 10X, the bank’s venture and innovation arm, and Singapore-based fintech company Lightnet. Fireblocks, a digital asset custody provider, is responsible for the custody technology. As of this writing, no response has been received regarding the specific blockchain or stablecoin used in the project.
Cross-border payments typically require banks to maintain a pre-funded Nostro account in the recipient’s country. According to ledgerinsights.com, stablecoins may eliminate this requirement, as stablecoin transactions are cost-effective and can take place 24 hours a day. SCB officials pointed out that the bank aims to improve the efficiency, reliability and accessibility of cross-border remittances through the use of blockchain technology and stablecoins.
Expansion to corporate customers
The solution is initially aimed at individual consumers, but SCB has plans to expand its offering to corporate customers. Meanwhile, in Japan, Japan’s three largest banks are considering a similar cross-border payment system, but have not disclosed whether they will use stablecoins. Instead, clients process payments through traditional banking channels.
Additionally, SCB Tech X participated in a stablecoin trial using Hedera’s Distributed Ledger Technology (DLT). Banks from South Korea, Taiwan, and South Africa also participated in the trial.
Other developments in SCB
In July 2024, Siam Commercial Bank partnered with Sunline to modernize its IT architecture to modernize SCB’s core banking systems. The partnership also aimed to enhance efficiency, stability, security, scalability, and improve financial transaction processing performance for deposits and loans to accommodate the ever-increasing volume of transactions.
Additionally, the partnership allows SCB to offer customized financial solutions to individual and corporate customers. The new core banking system is expected to take four years to develop and aims for SCB’s leadership as a fully-fledged digital banking entity.
