(6 September 2023 – Asia) The Association of South East Asian Nations (ASEAN) has a cross-border payments dream that is steadily becoming a reality.
Kapronasia reports that despite ingrained interoperability challenges, Southeast Asian countries are determined to build a payments rail of their own that can boost the use of local currencies while speeding up transaction times – possibly at the US Dollar’s expense – lowering transaction costs and strengthening connectivity among their respective financial systems.
“The Philippines, Brunei and Vietnam will join Indonesia, Thailand, Malaysia and Singapore in an interconnected QR code-based payment system” stated Bank Indonesian Governor, Perry Warjiyo.
”Whether ASEAN can achieve its dream of regional payments connectivity will probably depend on how ambitious it wants to be” Kapronasia stated.
“We have reason to believe that Asean will at least partially achieve its regional payment connectivity objective because, on the one hand, it’s already almost halfway there, and on the other, the persistent strength of the dollar in recent years has weakened Southeast Asian currencies, with adverse affects owing to their tendency to be net food and energy importers. Central bankers thus are highly motivated to use local currencies for more transactions.”