Japanese Blockchain startup, Soramitsu, is embarking on a venture that involves harnessing stablecoins and central bank digital currencies (CBDCs) to forge connections among various Asian nations.
Soramitsu’s initiative revolves around a cross-border payment system tailored for Asian countries. The company plans to integrate Cambodia’s CBDC and fiat-pegged stablecoins into its payment network, with a specific focus on countries like India, China, and Japan, as well as Southeast Asian regions.
This strategic endeavour leverages Soramitsu’s existing expertise in CBDCs, notably through its contributions to the Asian CBDC project, Bakong, in Cambodia, and Laos’ Lao kip, as stated in their announcement made on August 8.
Bakong, introduced in 2020, is a collaborative endeavour between the public and private sectors in Cambodia, allowing local residents to conduct payments at stores or transfer money using a mobile app, employing either the local riel currency or U.S. dollars. Since its launch, Bakong’s influence has extended to countries like Malaysia, Thailand, and Vietnam. By the close of 2022, Bakong had reportedly amassed 8.5 million users and facilitated around $15 billion in payments.
Soramitsu’s aspirations also extend to other Southeast Asian nations, as it aims to expand the project’s reach.
Part of the initiative involves establishing a Japanese exchange for stablecoins, which would facilitate currency conversions across various countries. For instance, a Thai user seeking to make a purchase from a Japanese e-commerce site could initiate payment in the form of a dollar-denominated Bakong, which would then be transformed into a yen-denominated stablecoin, according to the report.
A representative from Soramitsu revealed that the project primarily targets regulated stablecoins in Japan and other countries, alongside CBDCs. The spokesperson further emphasised Soramitsu’s dedication to forging connections between diverse CBDCs to ensure the autonomy of each nation’s CBDC system.
Moreover, Soramitsu is actively contributing to the SORA network and the Polkaswap decentralised exchange (DEX), exploring avenues to utilise the public, permissionless SORA network for cross-border issuance and CBDC settlement, incorporating token swapping on Polkaswap.
Among the highlights of Soramitsu’s envisioned payment network is the prospect of reduced transaction fees. The firm anticipates that the integration of stablecoins will facilitate seamless transfers without the need for traditional interbank payment networks.
Collaborating with partners such as Tokyo-based digital services company Vivit and the Tama University Center for Rule-making Strategies, Soramitsu is building a cross-border payment network. The startup is also collaborating with Japan’s Mitsubishi UFJ Trust and Banking and other key stakeholders to establish the requisite exchange infrastructure.