SCB cooperates with Lightnet to deploy international money transfer service using stablecoin, reducing costs and increasing transaction speed, promoting the trend of applying stablecoin 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 international payment and remittance services using stablecoins to customers. The move marks an important step in applying blockchain technology to the traditional financial sector in Thailand, while opening up opportunities for users to access financial services more effectively.
SCB’s new service allows customers to make cross-border transactions 24/7 at significantly lower costs than traditional methods. This advantage is especially attractive to recipients of remittances from countries with highly volatile currencies. Tridbodi Arunanondchai, CEO of Lightnet, emphasized that stablecoins – a crypto version of fiat money – not only reduce costs but also promote financial inclusion by requiring less capital per transaction, which benefits individuals, businesses and institutions.
Source: Siam Commercial Bank Stablecoins: Potential Payment Solutions for Developing Countries
SCB’s stablecoin service has been successfully tested in the Bank of Thailand’s sandbox. The support from the regulator shows that Thailand is actively facilitating the development of digital assets in the financial sector.
The use of stablecoins, especially USD stablecoins, is growing rapidly in developing countries. A Chainalysis report found that stablecoins account for about 43% of total cryptocurrency trading volume in sub-Saharan Africa. Eric Jardine, head of cybercrime research at Chainalysis, noted that there is a strong correlation between currency devaluation and stablecoin use.
A similar trend is playing out in Latin America. In hyperinflation-hit Venezuela, payments in cryptocurrencies, mostly stablecoins, accounted for 9% of total remittances in 2023. According to Chainalysis, more than 50% of digital assets sent as remittances to Venezuela over the past year were stablecoins. This trend was also observed in Argentina, Colombia, Brazil, and Mexico.
Mastercard, in its March 2024 report analyzing remittances to South America, also predicted that blockchain assets like stablecoins will continue to increase their market share and drive the digitization of the economy.