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Thai Bank Pilots Cross-Border Transaction Using Blockchain

Thailand’s Bank of Ayudhya PCL successfully conducted a cross-border transaction with a bank in Singapore using a blockchain, the bank announced Tuesday.

The bank, also known as Krungsri, announced it committed a real-time international remittance in concert with MUFG Bank, Mitsubishi Corporation and Standard Chartered Bank (Singapore) using the Krungsri Blockchain Interledger. Specifically, the bank used its blockchain to facilitate a transfer from Mitsubishi’s Krungsri account to its Standard Chartered account, according to a press release.

Using this technology in the future will allow Mitsubishi, and presumably other companies, “further improve its liquidity management efficiency and reduce their cost management,” the bank said.

Krungsri Consumer Group and digital banking and innovation head Thakorn Piyapan said the successful trial helped the bank gain the trust of Mitsubishi going forward, adding:

“Successfully completed in a matter of seconds, the technology-based transaction helps enhance their subsidiaries’ financial liquidity toward greater flexibility and efficiency.”

The bank previously trialed its blockchain in a cross-border test in September 2017, according to the release.

Bank of Ayudhya notably is also trialing Ripple’s xCurrent blockchain to also transfer payments between Thailand and Singapore, as previously reported by CoinDesk. As with its own blockchain platform, the bank hopes to test “high-speed cross-border payments between independent banks.”

Earlier this week, Banco Masventas in Argentina also trialed a cross-border payment – though it specifically used bitcoin through cryptocurrency startup Bitex to facilitate the transaction.

Krungsri Bank image via photobyphm / Shutterstock

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US Credit Unions Will Use DLT to Expand Payments Business

CULedger – the credit union services firm that grew out of a blockchain-focused consortium effort – is partnering with DLT startup Hedera to build a public system for cross-border payments.

Unveiled Tuesday, the deal will see the two firms collaborate on a public network based on Hashgraph, a kind of distributed ledger technology (DLT) created by the software company Swirlds.

The Hedera Hashgraph will be paired with a new global identity solution, MyCUID, in an effort o build what CULedger calls “a comprehensive system” for identity and global payments.

Rick Cranston, COO of CULedger, states the current cross-border payments as a “painful” process for parties involved, due to its high costs, limited visibility into transactions and more time involved.

He went on to say:

“Hashgraph is fast and it provides visibility between the two parties at a significantly lower cost. It also eliminates concerns regarding fraud and default, since transactions are recorded immutably on the public ledger, and manual processes, since transactions are automated via smart contracts.”

“CULedger continues to lead the financial services industry in innovative ways to apply distributed ledger technologies to the huge challenges that financial services firms and individuals face in making timely, secure, cost-efficient payments, be they across the country or around the world,” Mance Harmon, CEO of Hedera Hashgraph, said in a separate statement.

Business miniature image via Shutterstock

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Santander Launching Blockchain Payment App This Week

Global banking giant Santander Group is reportedly launching a blockchain-based application for cross-border foreign exchange on Friday.

According to a report by the Financial Times on Thursday, the app, dubbed One Pay FX, is to be rolled out for Santander’s customers in four countries – Spain, the U.K., Brazil and Poland – this week. The bank may also extend availability of the product to other financial institutions.

Built on distributed ledger technology provided by San Fransisco-based blockchain startup Ripple, the app is launching after two years in development and marks Santander as one of the first banks to offer blockchain-based foreign exchange payments for consumers.

As reported by CoinDesk, the U.K. arm of the Spain-based banking group kicked off the development process in conjunction with Ripple in 2016. At the time, the bank was trialing the application among its staff in the U.K.

The product also comes as a result of a continuing partnership between Ripple and Santander, which, through its venture capital arm InnoVentures previously invested $4 million in Ripple’s $32 million series A funding in 2015.

Santander Group has also previously indicated in a presentation that the app is based on Ripple’s xCurrent platform, a distributed network designed for instant cross-border transactions. xCurrent does not utlilize XRP, the native cryptocurrency derived from Ripple’s blockchain protocol.

According to the FT report, foreign exchange transactions from the four countries initially covered by the app could account for nearly half of the volume of Santander’s retail consumers. The group said it expects to introduce the service in additional countries for small businesses in the coming months.

Santander image via Shutterstock

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Singapore Central Bank Touts Blockchain for Cross-Border Payments

The chief of the Monetary Authority of Singapore (MAS), the city-state’s de facto central bank, has spoken of blockchain’s potential in international payments.

During a speech on Thursday at a financial industry event, MAS managing director Ravi Menon doubled down on his belief that one of the “strongest” use cases for crypto tokens is to facilitate cross-border settlements.

Menon said:

“This is the challenge that Singapore’s Project Ubin has set itself to solve: to use blockchain technology to enable entities across jurisdictions to make payments to one another.”

He continued to say that, following two “successful” proofs-of-concept, MAS has partnered with the Bank of Canada “to test and develop a cross-border solution using crypto tokens issued by the two central banks.”

The comments follow Menon’s earlier remarks that, while he thinks crypto tokens are not entitled to be called currencies given a lack of payment, storage and accounting features, he believes “we can never say never” that they will not become a currency in the future.

That said, he also raised concerns during the latest speech over the growing risks associated with the emerging fiscal technology, saying that MAS has been increasingly watching areas such as fundraising, money laundering and affects on financial stability.

In particular, on the investor-protection front, Menon reiterated MAS’s previously reported initial coin offering (ICO) guidance, cautioning that certain tokens could be regulated as securities.

He said:

“Investor protection is another immediate concern arising from the crypto mania. Where the crypto tokens represent ownership or a security interest over an issuer’s assets or any property, or a debt owed by the issuer, they may be regarded as securities under the Securities and Futures Act.”

Under this rule, initial coin offering issuers must meet securities rules before launching token sales. Further, secondary markets that facilitate trading of ICO tokens should also be registered and approved by the MAS, according to Menon.

And yet, the managing director also stated that MAS does not wish to stifle innovation around blockchain technology by introducing burdensome regulation, although he conceded that striking the right balance remains a challenge to the authority.

MAS image via CoinDesk archive

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Saudi, UAE Central Banks Team Up to Test Cryptocurrency

The central banks of the United Arab Emirates and Saudi Arabia are reportedly launching a pilot initiative that will see the two institutions test a new cryptocurrency for cross-border payments.

Regional news sources such as The National and Gulf Digital News report that Mubarak Rashid al-Mansouri, the UAE central bank’s governor, unveiled the initiative at a meeting of the Arab Monetary Fund (AMF). Though a press release tied to the Dec. 13-14 meeting does not directly relate to cryptocurrency, it does reference that financial technology topics more generally will be up for discussion among the group of central bankers and financial regulators.

According to GDN, al-Mansouri praised the effort as a first for the region.

“This is the first times[sic] the monetary authorities of two countries cooperation to use blockchain technology,” he said.

As quoted by The National, al-Mansouri described the project as a “digitisation of what we do already between central banks and banks.”

The involvement of Saudi Arabia’s central bank is notable, given that the institution to date has not commented on the tech or indicated that it was looking into potential use cases.

By contrast, the UAE is home to a number of private and public sector-driven initiatives, including Dubai’s Global Blockchain Council. A number of financial institutions have explored uses of the tech in recent months, include Emirates NBD, which is developing a blockchain-based service for validating bank cheques.

UAE money image via Shutterstock

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