BLOOM stablecoin initiative adds Malaysia, Thailand and Visa

The BLOOM stablecoin initiative led by the Monetary Authority of Singapore is no longer a Singapore-only effort. MAS said on Friday, Oct. 23, that Malaysia's central bank, Bank Negara, and Thailand's central bank have joined as policymaker members, giving the project three Southeast Asian central banks working on how tokenized deposits and regulated stablecoins can be used across borders.

What happened

BLOOM, short for Borderless, Liquid, Open, Online, Multi-currency, began in October last year as a public-private program to test settlement in tokenized bank money and regulated stablecoins, The Block reported. Its private-sector roster has also grown, turning the BLOOM stablecoin initiative into one of the larger bank-and-fintech groups working on digital money in Asia.

Visa, Mastercard, Ripple, Airwallex, Nium, Maybank, ShopeePay, Monee and the World Bank Group are the new participants, according to MAS. They join existing members such as Circle, Coinbase, DBS, J.P. Morgan, Anchorage Digital, Ant International, OCBC, Kasikornbank, Partior, Standard Chartered, Stripe, Temasek and UOB.

The work will cover three areas, MAS said. The first is how institutions accept and settle different forms of digital money for cross-border deals. The second is interoperability between networks and infrastructures. The third is programmable controls, including identity checks, sanctions screening and transaction limits.

Why it matters

Cross-border payments are where stablecoins promise the most and where rules differ most. Each bank that wants to accept a foreign token today must strike its own arrangements. MAS argues that common frameworks will cut that duplication, lower costs and shorten launch times, while central bank involvement keeps policy concerns in view.

"The future of finance will involve multiple forms of digital money operating across different institutions and markets," said Leong Sing Chiong, deputy managing director at MAS. Bank Negara deputy governor Aznan bin Abdul Aziz said frictionless payments using multiple digital monies are "closer to a tangible reality than a far-fetched fantasy."

The Bank of Thailand was more guarded. Deputy governor Daranee Saeju said the project would help it explore innovation "while ensuring our oversight remains prudent, proportionate, and responsive to evolving risks." Global standard-setters have flagged the same tension, as in the FSB's stablecoin warning on cross-border crises.

What's next

Some trials are already running. Ripple said in March it would test trade payments using its RLUSD stablecoin on the XRP Ledger within BLOOM, working with supply chain fintech Unloq to release payments automatically when set conditions are met, The Block reported.

Banks are also pushing deposit tokens, such as JPMorgan's move we covered in JPM Coin on Ethereum. The BLOOM stablecoin initiative puts both models on the same track. The full participant list is in the MAS announcement.

The World Bank Group's role is to bring the needs of developing economies into the design, MAS said. MAS did not give a timeline for live cross-border transactions between the three countries. For participating banks, the near-term work is agreeing on common standards for accepting each other's tokens, which MAS says should cut duplicated effort and shorten launch times.