A useful map of Southeast Asia, in case one were to get lost (via Shutterstock).
Asia & Australia

Central banks across Southeast Asia are embracing blockchain

Serving the unbanked and leapfrogging inefficient interbank and international settlement systems are a major focus

Financial authorities across Southeast Asia are embracing blockchain technology and digital currencies as a way of helping the poor get better access to banking services that can help lift them out of poverty, as well as speeding and improving interbank payments and cross-border settlements.


A report on Central Bank Digital Currencies issued on April 3 by the World Economic Forum singled out the National Bank of Cambodia as a leader in bringing blockchain technology into its national payments system for use by both commercial banks and consumers.

With technology scheduled for implementation in the second half of 2019, Cambodia’s central bank is planning to experiment with blockchain technology in its interbank payment and settlement system, which the report describes as inefficient. “This opens the window for experimentation to improve upon and potentially ‘leapfrog’ traditional wholesale interbank processes,” read the report by Ashley Lannquist, project lead, blockchain and distributed ledger technology, for the World Economic Forum.

The other way Cambodia is using blockchain technology is to benefit its poor, underbanked population which tends to use either cash—the Cambodian riel or U.S. dollar—or mobile-based payment apps to store and send money.

“Retail savings and payments are fragmented, and citizens are unable to reliably save money in mobile phone-based accounts,” she wrote. “They also have difficulty transferring money to those who use a different mobile money application from themselves.”

The new blockchain-based system will give consumers access to both commercial bank accounts and the various mobile phone-based apps. The goal is to both improve interoperability of the various payment systems and encourage underbanked people to open bank accounts in order to increase savings and improve financial stability.


In January 2018, Bank Indonesia, the Southeast Asian country’s central bank, announced plans to launch its own centralized cryptocurrency, the digital rupiah. At the time, the bank said it was looking at a 2020 launch.

As a result of the central bank’s friendliness towards blockchain technology, five other banks in the country are investigating ways to integrate the technology as well, The Asean Post reported on April 9. These are Bank Negara Indonesia, Bank Rakyat Indonesia, Bank Mandiri, Bank Danamon, and Bank Permata.

With a population of 264 million, Indonesia is the largest country is Southeast Asia, and the 14th largest recipient of remittances from migrants working abroad, according to the World Bank. Cutting the high fees charged by banks and money transfer firms like Western Union would increase the funds received, currently estimated at $10.5 billion annually.

In February, the Indonesian Ministry of Trade’s Futures Exchange Supervisory Board (Bappebti) issued the first regulations permitting the creation of cryptocurrency exchanges and regulating digital assets, but set the minimum investment for traders offering futures contracts at more than $71 million. Last June, Bappebti decreed that cryptocurrencies were commodities that could be traded as futures, but not used as payment instruments.


Thailand’s central bank also has a full-on central bank digital currency (CBDC) in the pipeline, Bank of Thailand’s governor, Dr. Veerathai Santiprabhob, announced in a speech at the Nomura Investment Forum Asia 2018 last June.

While the goal of Project Inthanon is to explore the potential and implications of a CBDC for interbank settlements rather than bring it immediately into use, Santiprabhob said, “These efforts should pave the way for faster and cheaper transaction and validation due to less intermediation process needed compared to the current system.”

Another project in the pipeline would use scriptless bond issuance to cut the time it takes to allocate bonds to retail investors from 15 days to just two, he noted. The bank is also looking at blockchain for supply chain financing and document authentication, Santiprabhob said in December.

The central banks of Thailand and Myanmar announced their approval of a joint project to allow migrant workers in Thailand to send remittances home to Myanmar via an Ethereum-based system at the Association of Southeast Asian Nations (ASEAN) Central Bank Governors’ Meeting on April 5.

Developed by Singapore’s Everex, the system will allow workers to send remittances from Thailand’s Krungthai Bank to Myanmar’s Shwe Bank. Promising competitive exchange rates, the system will allow recipients in Myanmar to “receive money by home delivery, cash pick up at Shwe Bank branches, or direct deposit to Shwe Bank account,” according to the release by the Bank of Thailand.

“Central banks in the region have worked together to support development of financial technology,” said Veerathai Santiprabhob, governor of the Bank of Thailand. “Central banks can play important roles as the facilitators and catalysts to promote payment connectivity. One key enabler is the interoperability of financial infrastructure and standards … which will facilitate more efficient cross-border payment linkages and encourage further innovations.”

Several other projects were announced at the ASEAN conference that use blockchain technology.

Bangkok Bank has partnered with a subsidiary of PTT Global Chemical Company Limited to test trade finance transactions between Thailand and Indonesia using the Voltron application to create and exchange letter of credit, built on R3 Corda. The goal is to cut processing time and paperwork in half.

Bank of Thailand is also testing Kungsri Bank Blockchain international funds transfer service, with the initial goal of sending money from Laos to Thailand, and from Thailand to Singapore in seconds.


In wealthy Singapore, the Monetary Authority of Singapore (MAS) may be cooling to the idea of creating a CBDC version of the Singapore dollar based on R3’s Corda distributed ledger technology, to be used for inter-bank payments. The project was successfully tested in March 2017, and involved 11 major banks, including Bank of America, Credit Suisse, Citi, HSBC, and JPMorgan.

MAS’ managing director threw cold water on the idea of a digitized version of the wealthy city-state’s currency in an interview with the Financial Times (paywall) in January 2018. Still, the CBDC test was a part of the broader Project Ubin, which is still moving ahead with other plans, including cross-border payments and smart-contract payments.

In August, the MAS and Singapore Exchange (SGX) announced plans to work with Deloitte, Nasdaq, and Anquan Capital to create a “Delivery versus Payment” (DvP) system built across several blockchain platforms that would allow financial institutions and corporate investors to carry out the simultaneous exchange and settlement of digital currencies and securities assets

“This initiative will deploy blockchain technology to efficiently link up funds transfer and securities transfer, eliminating both buyers’ and sellers’ risk in the DvP process,” said Tinku Gupta, chair of Project Ubin and head of technology at SGX, in a statement. “This is a collaborative innovation bringing together multiple players to pursue real-world opportunities that will benefit the ecosystem.”

The Philippines

There are a lot of financial projects underway in the Philippines, where financial authorities this month approved the 29th cryptocurrency exchange. Analysts feel the central bank’s governor sees blockchain as a tool with which to advance the growth of electronic payment systems in the island chain nation, in which 70 percent of the population is unbanked, according to Voice of America.

To that end, ConsenSys is working with Unionbank of the Philippines on Project i2i, which has received central bank approval to build an Ethereum-based payment platform for 130 rural banks aimed at the unbanked population. And on April 3, Philippines e-wallet provider Coins.ph announced a partnership with Western Union to allow customers to directly receive and hold remittances.

On March 18, the Stellar-powered IBM Blockchain World Wire announced that it had reached an agreement with the Rizal Commercial Banking Corporation (RCBC) in the Philippines, to release stablecoins denominated in the Philippine peso. Five other nations had banks doing the same, IBM said at the time.


In Vietnam, there are signs of a thaw in the anti-cryptocurrency mindset of the country’s financial authorities which banned trading in digital assets in July 2018, followed a month later by a ban on the import of new cryptocurrency mining computers.

On March 22, Zug, Switzerland-based blockchain firm KRONN Ventures announced that it had signed an agreement with Linh Thanh Group, a major Vietnamese distribution firm, to produce cryptocurrency and establish a licensed cryptocurrency exchange.

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.