Japanese Startup Plans To Use CBDCs To Set up Cross-border Payment System

Soramitsu, a Japanese startup specializing in blockchain technology, is currently working on a new project to develop a cross-border payment system for Asian countries that utilizes central bank digital currency (CBDC) technology.

Soramitsu plans to implement Cambodia’s CBDC and stablecoins pegged to fiat currency in its latest payment system. The system aims to cater to countries such as India, China, Japan, and Southeast Asia as a whole, Cointelegraph reported.

Soramitsu’s latest project expands on their experience with CBDC, including their participation in Cambodia’s Bakong CBDC project and Laos’s Lao Kip project.

In 2020, Cambodia introduced Bakong, a joint venture between the public and private sectors that enables Cambodian citizens to purchase at stores or transfer funds via a mobile app using either the local riel currency or U.S. dollars. Bakong’s reach has grown to include countries such as Malaysia, Thailand, and Vietnam, and by the end of 2022, it had amassed 8.5 million users and processed roughly $15 billion in payments.

Soramitsu aims to expand to other Southeast Asian countries.

As part of the project, Soramitsu intends to create a Japanese exchange for stablecoins as part of its project. This exchange would facilitate the conversion of currencies from different countries. For instance, if a Thai user wished to buy something from a Japanese e-commerce platform, they could pay using Bakong, denominated in dollars, and then have it converted to a stablecoin denominated in yen.

Soramitsu’s upcoming payment network will offer lower transaction fees, thanks to the integration of stablecoins. This means that users can transfer stablecoins without relying on traditional interbank payment networks.

Soramitsu has joined forces with Vivit, a digital services company based in Tokyo, and the Tama University Center for Rule-making Strategies. The objective is to collaborate with leading e-commerce platforms. Additionally, the company is collaborating with Mitsubishi UFJ Trust and Banking of Japan and other partners to establish the required exchange infrastructure.