Home Views Asia FX

Smartphone apps bury the case for a pan-Asian currency

Andy Mukherjee for Bloomberg
Andy Mukherjee for Bloomberg10/17/2022 01:10 PM GMT+08  • 5 min read
Smartphone apps bury the case for a pan-Asian currency
From Singapore and Malaysia to Thailand, Indonesia and the Philippines, countries in Southeast Asia want a multilateral network of payments by 2025. Photo: Bloomberg
Font Resizer
Share to WhatsappShare to FacebookShare to LinkedInMore Share
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Unrealistic as it was technically, the idea of a pan-Asian currency always had some political support: Since 2005, the Japanese have published the exchange value of something called the Asian Monetary Unit, a precursor to what would one day become the region's equivalent of the euro. The debt crisis in southern Europe — and the threat it posed to the single currency in the early part of the last decade — ended that pipe dream.

Now there’s a more modest goal: Keep money national, but allow it to jump borders effortlessly. This vision could start becoming a reality in three years and have a far-reaching impact on a continent expected to account for half of the world’s consumption growth in the current decade.

That’s a US$10 trillion ($14.26 trillion) opportunity, according to McKinsey & Co. A big chunk of this additional consumption will be fulfilled by small and medium-sized businesses, and a lot of it will occur online. But credit cards and PayPal are expensive options for small merchants. And while Indonesian sellers can easily accept QR-code-based transfers from local digital banking or fintech apps, they can’t do the same for Singapore banks’ customers. National boundaries get in the way. As Ravi Menon, chief of the Monetary Authority of Singapore, said in a recent speech: “The current state of cross-border payments is not fit for the 21st century.”

×
Loading next article...
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
Subscribe to The Edge Singapore
Get credible investing ideas from our in-depth stock analysis, interviews with key executives, corporate movements coverage and their impact on the market.
© 2022 The Edge Publishing Pte Ltd. All rights reserved.