Briefly: Members of the Association of Southeast Asian Nations (ASEAN) have introduced a new system to expedite cross-border payments.
Here’s how it works:
- 📱 a Malaysian tourist in Bali scans a QR code, enabling her Malaysian banking app to process the payment directly into Indonesian rupiah
- 📉 that means she buys her souvenir, without any fees, in Indonesian rupiah rather than converting via US dollars, slashing transaction costs
And some say it could be a step towards an ASEAN common market, especially if this same tech can be used to facilitate bigger transactions like business loans.
Intrigue’s take: It isn’t the disaggregated blockchain future that Bitcoin gurus promised, but the ASEAN QR Code is a real step forward for digital payments.
And it’s one that empowers local currencies, which could ultimately limit the drastic exchange rate fluctuations that have been a challenge in Southeast Asia and (ahem) in the crypto-verse.
Also worth noting:
- Malaysia, Indonesia and Thailand are currently on the new system, with Singapore, Vietnam and the Philippines expected to join later this year.
- The system involves each country’s central bank making a settlement agreement using their local currency rather than the US dollar.