As a seasoned crypto investor with roots deeply entrenched in the dynamic world of finance, I find the recent collaboration between SCB and Lightnet to be a game-changer. Having witnessed the evolution of digital assets over the past decade, it’s clear that stablecoins are poised to revolutionize cross-border transactions, particularly for remittances.
In a recent announcement, Thailand’s longest-standing commercial bank, Siam Commercial Bank (SCB), unveiled plans to initiate stablecoin-based cross-border payment and remittance services for its customers, in partnership with the fintech company, Lightnet.
By incorporating stablecoin functionalities, our clients can facilitate cross-border transactions at any time during the week, even round the clock – all while benefiting from reduced transaction fees.
Lowered transaction costs associated with stablecoins make them a tempting choice for individuals receiving high-value currency remittances, as pointed out by Lightnet CEO Tridbodi Arunanondchai. He emphasizes that these tokenized versions of traditional currencies offer numerous advantages to all customers.
“This project also promotes financial inclusion as there is a lower capital requirement per transaction. Beyond this, the project also provides unique value propositions to retail, corporate, and institutional clients.”
The bank’s innovative stablecoin offerings underwent testing within the Bank of Thailand’s regulatory sandbox – a special initiative that allows financial organizations to explore digital currencies in a more relaxed regulatory environment, free from the worry of legal repercussions.
Stablecoins become a store of value in developing nations
People living in developing countries are progressively turning to US dollar-backed digital currencies as a secure place to hold their savings, as they strive to safeguard their buying power from fast-devaluing domestic currencies.
A recent report from Chainalysis revealed that stablecoins now account for approximately 43% of all crypto transaction volume in Sub-Saharan Africa. Eric Jardine, cybercrimes research lead at Chainalysis, also told CryptoMoon that there is a strong correlation between currency devaluation and stablecoin adoption.
Data originating from Latin America appears to align with Chainalysis’ conclusions. Particularly in Venezuela, where currency depreciation is significantly noticeable, cryptocurrency transactions made up approximately 9% of all remittances in the year 2023.
As reported by Chainalysis, more than half of the digital funds transferred as remittances to Venezuela last year consisted of stablecoins. This pattern is consistent in Argentina, Colombia, Brazil, and Mexico as well.
Mastercard, a leading player in payment solutions, released a report in March 2024 highlighting an increase in remittances to South America. This growth rate was found to be higher compared to any other global region.
It’s anticipated by the credit card and payment service provider that digital assets such as stablecoins, based on blockchain technology, will keep growing in popularity and contribute significantly to the evolution of a more digitally-based economic system.
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2024-10-16 19:58