Written by Malik Corbett
Siam Commercial Bank (SCB) of Thailand has partnered with Ripple to create a mobile payment application powered by the blockchain. SCB has been aggressively working on banking products powered on the blockchain for some time now. Last year in July, the SCB launched a remittance product with Ripple in a sandbox environment for the Japan-Thailand corridor.
SCB big play into blockchain-based financial products could provide the bank with potentially a bigger share of the remittance in Southeast Asia but also could increase the bank’s footprint in China. Thailand is a popular tourist destination for the Chinese. In fact Thailand’s currency, the baht has hit record highs due in part to Chinese tourism.
To that end, Asia is a region that is worth watching for many Blockchain investors. Not only is it fascinating to watch the breakneck pace at which the digital transformation on the continent is taking place but China in particular has an enormous opportunity to upend the current financial system. Unlike, their western counterparts, China and other nations seeking to get out of the western dominated financial system, can build from scratch. In the western-based financial system, businesses and governments alike are trying to figure out how to fit their existing systems and processes into a web3.0 framework which has been extremely difficult.
In many ways globalization is at a crossroads. The rise of populism and protectionism has caused many to question the existing system. Last year, the head of the Central Bank of England, Mark Carney, suggested at Jackson Hole that the US dollar be replaced as the world’s reserve currency with a new international monetary and financial system based on a basket of global currencies.
You think that the US Dollar could not be Replaced? Think again.
In 2015 China launched the Cross-border Interbank Payment System or CIP which is an alternative financial clearing and settlement system to the U.S. dominated settlement system: The Society for Worldwide Interbank Financial Telecommunication or SWIFT. In fact, CIP saw an 80% growth in terms of value in 2018. The Chinese system attracted countries such as Russia, Turkey and some African nations who are exposed to U.S. sanction.
Although, SWIFT is not even close to being up-end just yet. There is much concern from many U.S. leaders that the dominance of the dollar is under a long-term strategic threat. If the dollar loses its standing as the world reserve, it would have major consequences on the United States’ global influence and power. The Chinese see blockchain as well as artificial intelligence as critical technologies for their global ambition.