Japanese blockchain startup Soramitsu is exploring new central bank digital currency (CBDC) applications with a new project on the cross-border payment system for Asian countries.
Soramitsu will deploy Cambodia’s CBDC and fiat-pegged stablecoins as part of its new payment system targeting countries like India, China, Japan and regions like Southeast Asia.
Launched in 2020, Cambodia’s Bakong is a public-private initiative allowing Cambodian residents to pay at stores or send money through a mobile app using the local currency riel or U.S. dollar. Since launch, Bakong’s adoption has expanded to countries like Malaysia, Thailand and Vietnam. By late 2022, Bakong reportedly had 8.5 million users and handled around $15 billion in payments.
“The company is working to enable similar cross-border payments for India, China and Laos, and hopes to bring Japan into this network,” the latest report notes.
As part of the project, Soramitsu plans to establish a Japanese exchange for stablecoins, which would allow conversions of currencies from diverse countries, the report says, adding:
“If a consumer in Thailand wanted to make a QR code-based payment to buy something from a Japanese e-commerce site, for example, the payment would be sent to the exchange as a dollar-denominated Bakong and converted to a yen-denominated stablecoin.”
One of the features of Soramitsu’s planned payment network is anticipated reduction in transaction fees. According to the firm, the fee reduction would be enabled through implementing stablecoins, which can be transferred without going through existing interbank payment networks.
To build the cross-border payment network, Soramitsu formed a team with Tokyo-based digital services company Vivit and the Tama University Center for Rule-making Strategies. It is looking to partner with major e-commerce sites.
The firm is also working with Japan’s Mitsubishi UFJ Trust and Banking and other partners to create the necessary exchange infrastructure.
Soramitsu did not immediately respond to Cointelegraph’s request for comment. This article will be updated pending new information.