The central banks of Malaysia and Thailand have joined the Monetary Authority of Singapore’s (MAS) BLOOM initiative to develop common approaches for using digital money in cross-border transactions, according to an announcement.
The development comes as financial institutions explore tokenised deposits and regulated stablecoins.
The three central banks will work with financial institutions, payment networks and technology providers on how different forms of digital money can be accepted and settled across institutions, networks and jurisdictions, MAS said in a statement.
BLOOM, which stands for Borderless, Liquid, Open, Online and Multi-currency, is a public-private initiative aimed at improving interoperability between digital money arrangements and developing frameworks for cross-border settlement.
Its participants have expanded to include Airwallex, Mastercard, Maybank, Monee, Nium, Ripple, ShopeePay, Visa and the World Bank Group, MAS said.
The initiative will focus on three areas: acceptance and settlement across jurisdictions, interoperability between digital money networks, and programmable controls such as identity verification, sanctions screening and transaction limits.
MAS said greater coordination would be needed as markets develop different forms of digital money and regulatory requirements.
Common approaches could reduce the need for financial institutions to establish separate arrangements with individual counterparties or markets, lowering implementation costs and speeding up deployment.
“The future of finance will involve multiple forms of digital money,” said Leong Sing Chiong, MAS deputy managing director for markets and development, adding that cooperation between policymakers and industry would be needed to address acceptance, settlement and interoperability.
Aznan bin Abdul Aziz, deputy governor of Bank Negara Malaysia, said cross-border payments using multiple forms of digital money were closer to becoming a reality and that the central bank looked forward to exploring the possibilities through BLOOM.
Daranee Saeju, deputy governor for payment systems stability and financial services supervision at the Bank of Thailand, said the initiative would help inform regulatory approaches to tokenised money, particularly in cross-border payments and wholesale settlement, while maintaining prudent and proportionate oversight.
The World Bank Group’s participation is expected to bring experience in payment system modernisation, cross-border payments and financial inclusion, including perspectives from developing economies.
BLOOM will also examine how international standards and local supervisory requirements can be applied to cross-border transactions without disregarding differences in national regulations.
