Japanese blockchain startup, Soramitsu is taking the lead in developing a cross-border payment system that harnesses the potential of central bank digital currencies (CBDCs) and fiat-pegged stablecoins as reported by Nikkei. This initiative aims to establish seamless financial connectivity among countries such as Japan, India, China, and various regions within Southeast Asia.
Soramitsu’s Cross-Border Payment System
Soramitsu’s ambitious project revolves around deploying Cambodia’s CBDC and fiat-pegged stablecoins as the cornerstones of a robust payment network. By leveraging its extensive expertise in CBDC applications, Soramitsu is poised to revolutionize financial transactions across borders.
An instrumental player in the Asian CBDC project Bakong, Soramitsu has played a pivotal role in Cambodia’s financial landscape, extending its influence to the Lao kip currency as well.
Expanding Horizons: Bakong’s Success and Beyond
Notably, the inception of Cambodia’s Bakong in 2020 marked a significant stride in public-private collaboration. This enabled Cambodian residents to engage in transactions and money transfers using the local currency riel or the U.S. dollar through a user-friendly mobile app.
Furthermore, the reach of Bakong has extended beyond Cambodia’s borders, encompassing countries like Malaysia, Thailand, and Vietnam. By the close of 2022, Bakong boasted an impressive user base of 8.5 million individuals. Additionally, it facilitated transactions totaling approximately $15 billion.
Soramitsu’s visionary pursuit encompasses the aspiration to replicate the cross-border success achieved by Bakong in other key economies, including India, China, and Laos. Soramitsu is actively spearheading endeavors to establish the necessary infrastructure for international transactions. This is with an overarching goal to integrate Japan into this innovative network.
Glimpse into Soramitsu’s Approach
A defining facet of Soramitsu’s prospective payment network is the projected reduction in transaction fees. This goal was made attainable through the strategic implementation of stablecoins. Additionally, these digital assets facilitate seamless currency conversions without reliance on existing interbank payment systems. Therefore, it promises a streamlined and cost-effective transaction experience for users.
Soramitsu’s strategic approach involves forging partnerships with key industry players. The collaborative efforts of Soramitsu, Tokyo-based digital services company Vivit, and the Tama University Center for Rule-making Strategies have culminated in the formation of a dynamic team focused on realizing the cross-border payment network’s potential.
Additionally, Soramitsu is actively engaging with major e-commerce platforms to foster strategic partnerships that can further fuel the project’s success.
Forging Pathways with Established Institutions
To lay the foundation for the anticipated cross-border payment ecosystem, Soramitsu is collaborating with Mitsubishi UFJ Trust and Banking, a prominent player in Japan’s financial landscape, alongside other esteemed partners. These collaborations are geared towards creating the requisite exchange infrastructure, ensuring the seamless flow of transactions across borders.
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