SCB partners with Lightnet to deploy international money transfer services using stablecoin, reducing costs and increasing transaction speed, driving the trend of stablecoin adoption in cross-border payments, especially in developing countries.
On October 16, Siam Commercial Bank (SCB), Thailand's oldest bank, announced a partnership with fintech company Lightnet to provide stablecoin-based international payment and money transfer services to customers. This move marks an important step in the application of blockchain technology in the traditional financial sector in Thailand, and opens up opportunities for more efficient access to financial services for users.
SCB's new service allows customers to conduct 24/7 cross-border transactions at significantly lower costs compared to traditional methods. This advantage is particularly attractive to recipients of remittances from countries with highly volatile currencies. Tridbodi Arunanondchai, CEO of Lightnet, emphasized that stablecoins - fiat-backed digital currencies - not only reduce costs but also promote financial inclusion due to lower capital requirements for each transaction, benefiting individuals, businesses, and organizations.
Stablecoin: A Potential Payment Solution for Developing Countries
SCB's stablecoin service has been successfully tested in the sandbox framework of the Bank of Thailand. The support from the regulatory authority indicates that Thailand is actively creating an environment for the development of digital assets in the financial sector.
The trend of using stablecoins, particularly USD stablecoins, is rapidly increasing in developing countries. A Chainalysis report shows that stablecoins account for around 43% of the total Sub-Saharan Africa cryptocurrency trading volume. Eric Jardine, head of Chainalysis' cybercrime research team, noted a strong correlation between currency devaluation and the use of stablecoins.
A similar situation is also occurring in Latin America. In Venezuela, where hyperinflation is rampant, cryptocurrency payments, mainly stablecoins, are expected to account for 9% of total remittances in 2023. According to Chainalysis, more than 50% of the digital assets sent as remittances to Venezuela in the past year were stablecoins. This trend has also been observed in Argentina, Colombia, Brazil, and Mexico.
Mastercard, in its remittance analysis report for South America released in March 2024, also predicted that blockchain-based assets like stablecoins will continue to gain market share and drive the digitalization of the economy.
