Kasikornbank, Thailand’s fourth largest bank by assets, has developed a blockchain platform in partnership with Chinese fintech firm International Business Settlement (IBS), allowing for baht-yuan cross-country settlements.
As reported by Nikkei, the system will allow for direct settlement of transfers between baht and yuan or Thailand and China without any need for the currencies to be converted to USD at any point. The USD, often seen as the default benchmark currency around the world, typically plays a part during cross-border international remittance or settlements when wired through a clearing house.
In a statement, Kasikornbank chairman Banthoon Lamsam said:
IBS has the technology and network to facilitate international settelemtn that is not based just on the U.S. dollar, at a time when the yuan’s international presence is increasing.
Based on a blockchain platform developed by IBS, the ledger is essentially an alternative to the globally-adopted SWIFT settlement system. According to the Chinese fintech firm, its blockchain platform will be quicker, cheaper and safer, compared to the SWIFT network.
The new blockchain-based settlement platform comes at a time when the trade corridor between the two countries is seeing some of its highest volumes yet. China is now Thailand’s largest trade partner, leaping beyond Japan and the United States. China is also the second largest source of imports from Thailand, with annual trade between the two countries now at 2.3 billion baht (approx. $64 million). Chinese tourists also total 20% of all tourism arrivals in Thailand. Suffice to say, the baht-yuan corridor is certain to benefit plenty from a fintech-enabled push by blockchain technology.
Meanwhile, the China-US payments corridor is also getting a facelift as a result of San Francisco-based blockchain platform Wyre, which raised $5.8 million in a recent Series A round. Compared to a traditional settlement intermediary that could take anywhere between 1-3 days, Wyre promises transfers between the two countries in yuan and USD in less than 6 hours.