Siam Commercial Bank (SCB), one of the oldest and most elite financial institutions in Thailand, has entered history books by announcing adoption of stablecoins for cross-border payments in the country. This is likely to change the face of the existing remittance landscape by promising much more efficient and cost-effective solutions in terms of transfers across geographies.
With the partnership of fintech company Lightnet, stability coins’ technology will make cross-border payments much faster and less expensive for global transactions. In return, its clients will enjoy 24/7 cross-border remittance services, which has become an aggressive move for Siam Commercial Bank and sets Thailand as a player in this emerging digital economy.
With its collaboration with Lightnet, SCB will introduce a stablecoin-based remittance service designed to reduce transaction fees and offer better transfer speeds for the recipient. The adoption of stablecoins allows a recipient to send and receive money all around the world, something that traditional banking often fails to provide. For both parties, SCB is planning to add this technology as a service in order to make cross-border money transfers relatively easily accessible for individuals and businesses operating in Thailand.
The Role of Thailand’s Digital Sandbox
Siam Commercial Bank piloted the stablecoin payment service in the digital assets sandbox of the Bank of Thailand before it launched the same to the market. The regulatory sandbox presented SCB and Lightnet with a good opportunity to test the functionality and efficiency of their stablecoin solutions with the country’s financial regulators. This testing phase was important for compliance with legal standards and scale-up accordingly based on future demand.
Siam Commercial Bank’s implementation of stablecoins promises to change the financial ecosystem in Thailand. On the one hand, incorporating blockchain into cross-border payments increases the efficiency with which remittances are processed; on the other hand, its contribution to the growth of the digital economy, in the larger sense, does much more for Thailand. With blockchain-based stablecoin payments, there is an end to several intermediaries on international transactions, which in most cases, charge high fees and take a long time to process.
Global Surge in Stablecoin Adoption
SCB accepts stablecoins now, as just about every nook and cranny of the globe is increasingly using this kind of digital asset. According to Chainalysis, stablecoins serve as key instruments for cross-border payments, especially in regions where traditional banking systems prove inefficient or inaccessible. As such, it’s the countries of Brazil, Nigeria, and India that forward the cause of the stablecoin movement by using these new forms of assets instead of the volatile local currencies. For Sub-Saharan Africa, stablecoins make up 43% of all transactions in cryptocurrency, making them a far cry from minor players in the market remittances and trade.
Even with these advantages, growing usage of stablecoins are straining them. Some financial experts have been warning the people about “crypto-dollarization”, where widespread adoption of stablecoins might lead to a weakening of local monetary policies. Once adopted widely by people within certain regions, governments would then be powerless to control their currency supply. This leads to rather unintended economic consequences.
SCB’s Role in the Future of Finance
However, for most users, the advantages of stablecoins in terms of speed, efficiency, and accessibility weigh more than the above concerns. According to Chainalysis, more than 70% of the respondents expect to increase the usage of stablecoins in the next year, mostly because of their great efficacy in cross-border payments, payrolls, and remittances. Since Siam Commercial Bank is Thailand’s fourth-largest bank, adopting stablecoins would be a giant leap towards modernizing Thailand’s financial system. This would also be the next move by Siam Commercial Bank in an attempt to reiterate its efforts to be at the forefront of innovation concerning digital products.
Accepting stablecoins is one of the major advances for Siam Commercial Bank in the modernization of cross-border payments. Thanks to SCB’s collaboration with Lightnet, an inherently cross-border remittance service has now been improved in terms of speed, cost-efficiency, and simplicity. As stablecoins continue to grow globally, leadership by Siam Commercial Bank in this space will place it at the forefront of Thailand’s digital economy and future for financial services.
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