Thailand's SCB Pioneers Stablecoin-Based Cross-Border Payments

Siam Commercial Bank (SCB) has launched Thailand’s first cross-border payments system using stablecoins—digital assets pegged to gold or the dollar. This move aims to secure Thailand’s lead in banking and financial innovation.

Stablecoins, unlike volatile cryptocurrencies, maintain a stable value by being pegged to assets like the U.S. dollar or gold. This stability reduces risks and operational costs for banks, making transactions faster and cheaper.

SCB’s system, developed with Singapore-based Lightnet and digital asset custody provider Fireblocks, passed the Bank of Thailand’s regulatory sandbox. It promises to streamline international transactions for retail customers, cutting down on currency conversion fees and operational delays.

Thailand has been a regional leader in adopting new financial technologies, particularly digital payments. The COVID-19 pandemic accelerated this trend, with PromptPay, a government-backed QR code payment system, linking Thailand to other Southeast Asian countries.

Despite the crypto market’s volatility, stablecoins offer a safer alternative, attracting interest from both retail and corporate clients. SCB plans to extend this stablecoin settlement system to corporate clients after the retail rollout.

In summary, SCB’s initiative marks a significant step in integrating stablecoins into mainstream banking, potentially reshaping cross-border payments and solidifying Thailand’s role as a financial hub in ASEAN.