Siam Commercial Bank (SCB), Thailand’s oldest commercial bank, recently revealed it will begin offering stablecoin cross-border payment and remittance services to its clients in collaboration with fintech company Lightnet.
Adding support for stablecoin services will allow clients to send or accept cross-border transactions 24 hours a day, seven days a week — while reducing transaction costs.
These reduced transaction fees make stablecoins an attractive option for those receiving remittances from higher-value currencies. Lightnet CEO Tridbodi Arunanondchai highlighted the benefits of the tokenized fiat equivalents for all customers:
“This project also promotes financial inclusion as there is a lower capital requirement per transaction. Beyond this, the project also provides unique value propositions to retail, corporate, and institutional clients.”
The bank’s new stablecoin services were tested through the Bank of Thailand’s regulatory sandbox — a program for financial institutions to experiment with digital assets under looser restrictions without fear of regulatory lawsuits.
Source: Nicholas Wenzel
Related: Sen. Hagerty introduces Clarity for Payment Stablecoins Act of 2024
Stablecoins become a store of value in developing nations
United States dollar-denominated stablecoins are increasingly used as a store of value by residents of the developing world, who save in dollars to preserve purchasing power against rapidly depreciating local currencies.
A recent report from Chainalysis revealed that stablecoins now account for approximately 43% of all crypto transaction volume in Sub-Saharan Africa. Eric Jardine, cybercrimes research lead at Chainalysis, also told Cointelegraph that there is a strong correlation between currency devaluation and stablecoin adoption.
Data from Latin America seems to corroborate the findings from Chainalysis. In Venezuela — where currency devaluation is especially pronounced — crypto payments accounted for 9% of remittances in 2023.
According to Chainalysis, well over 50% of the digital assets sent as remittances to Venezuela during the year were stablecoins. This trend also holds for Argentina, Columbia, Brazil and Mexico.
In March 2024, payments giant Mastercard published a report analyzing remittances to South America, revealing that remittances to the continent were growing faster than any other region in the world.
The credit card and payments company predicted that blockchain assets like stablecoins would continue to increase market share and drive the shift to an increasingly digital economy.
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