In the final installment of the series on APAC’s crypto landscape, Monica Jasuja examines how stablecoins and CBDCs are redefining the region’s money rails, what this means for payment operators – banks, PSPs, and merchants – and how these shifts are shaping the future of payments in Web3.

You can also read Part 1 and Part 2 of this series. 

How stablecoins and CBDCs are rebuilding APAC’s money rails

Central Bank Digital Currencies are Asia‑Pacific’s sovereign answer to private crypto. They are live systems that increasingly sit under real cross‑border and interbank flows.

China’s digital yuan, the e‑CNY, remains the largest live retail CBDC, with hundreds of millions of wallets and growing usage across transport, retail, and government payments. Its strategic complement is Project mBridge, the multi‑CBDC platform built by the BIS Innovation Hub together with the central banks of Hong Kong, China, Thailand, and the UAE, with Saudi Arabia now a full participant and more than two dozen other central banks and international bodies, IMF and World Bank among them, watching as observers. Having reached the minimum viable product stage in 2024, mBridge has already processed real‑value cross‑border payments and trade finance transactions using tokenised central‑bank money.

What mBridge proves is that central banks can do many of the same things stablecoin advocates promised—atomic cross‑border settlement, programmable trade finance, 24/7 availability—without handing control of settlement assets to private issuers. In pilots across at least 15 use cases, banks in participating jurisdictions have used wholesale CBDCs on mBridge to settle commercial payments, ecommerce, and supply‑chain finance in seconds rather than days, in trade corridors worth over USD 730 billion a year. That is both a new rail for Web 3 payment players to plug into and a potential competitor to the fee pools of today’s correspondent banking model.

India has chosen a different path but with the same instinct, which is to keep the sovereign hand on the tiller. Instead of expanding private rupee‑linked tokens, India is channelling innovation into the e‑rupee, adding programmability, and exploring cross‑border pilots rather than opening the door to foreign or privately issued INR stablecoins. RBI has signalled that bilateral CBDC pilots for cross‑border payments are the next step and has agreed with the UAE to test a CBDC bridge for remittances and trade, but these pilots are still in the exploration and design phase rather than live production. For global payment operators, that means the ‘on‑ramp’ for digital rupee flows will be state rails, not private Web 3 instruments, at least for the foreseeable future.

Singapore has gone straight for the wholesale layer. MAS’s first live settlement of interbank overnight lending using wholesale CBDC. The SGD Testnet in 2025 showed how commercial banks can borrow and repay using tokenised central‑bank money, with those transactions recognised in their official books and regulatory reports. The state is quietly rebuilding the high‑value settlement layer, leaving room for private tokens only above that base.

Other APAC central banks are lining up behind similar wholesale designs. Hong Kong’s e‑HKD work, under the HKMA’s Fintech 2025 agenda, is now explicitly pivoting toward wholesale use cases (settlement of tokenised assets and cross‑border payments) alongside platforms like mBridge, positioning e‑HKD as one settlement asset in a broader digital‑money ecosystem rather than a standalone retail product. In the Philippines, BSP’s Project Agila is a wholesale CBDC proof‑of‑concept focused on interbank and large‑value payments. Testing with participating banks has been completed, and the results will feed into BSP’s CBDC roadmap, but no full launch decision has been announced yet.

Australia, through the RBA and the Digital Finance CRC, has completed an eAUD pilot and is now running Project Acacia to test wholesale CBDC, tokenised deposits, and stablecoins for settling tokenised assets in wholesale markets, again treating CBDC as one of several settlement assets in a digital‑money stack, not a mass‑market retail product.

Vietnam has instructed its central bank to research and pilot a CBDC, but remains in the research phase with no publicly launched pilot yet, and details on whether it will take a retail, wholesale, or hybrid form are still open.

Stablecoins: the design playbook central banks are copying

Before any of these CBDC projects moved beyond whiteboards, stablecoins had already stress‑tested the core design questions for digital money in the wild in terms of what backs it, how reliably it redeems, and whether it can sit natively inside cross‑border payment flows. Fully reserved, fiat‑pegged tokens showed that programmable, internet‑native money could cut costs in remittances, tighten liquidity management, and compress settlement times for B2B trade, long before central banks were willing to put their own balance sheets on‑chain.​

Stablecoins showed Asia‑Pacific what programmable, internet‑native money can do for remittances, B2B flows, and liquidity. Central banks are now building their own digital layer underneath with multi‑CBDC platforms like mBridge for cross‑border settlement, wholesale CBDCs in hubs like Singapore, Hong Kong and Manila, and tightly controlled retail CBDCs like the e‑CNY and e‑rupee for domestic use. For Web 3 payment operators, the question is where they choose to ride on these sovereign rails, and where they are willing to compete with them.

What this means for payment operators

Regulatory frameworks are not obstacles to navigate around. For banks, PSPs, and merchants operating in Asia-Pacific's evolving crypto landscape, the strategic question is how to position for advantage within it.

Banks: four strategic options

At EPAA, we’ve watched this debate play out in boardrooms across the region: should we build, partner, wait for state rails, or join a consortium? The answer depends on your market position, regulatory relationships, and appetite for multi-year infrastructure investment.

Option 1: deep integration

Build proprietary tokenised deposit or stablecoin infrastructure. This path suits Tier-1 banks in gateway markets with regulatory clarity, such as Singapore, Hong Kong, and Australia, where significant cross-border treasury volumes justify a multi-year commitment.

HSBC has expanded tokenised deposits for institutional cross-border payments between Hong Kong and Singapore, processing EUR, GBP, USD, HKD, and SGD, with AED planned for 2026. DBS participates in Project Guardian. ANZ issued the A$DC stablecoin as a fully-backed payment token. NAB reportedly executed what it described as the world's first intra-bank cross-border settlement using three stablecoins on Ethereum.

These aren't pilots tucked away in innovation labs. These are production systems handling real money.

Option 2: partnership model

Integrate with regulated stablecoin PSPs or custody providers via API. This suits regional banks seeking faster time-to-market without building from scratch.

BNY Mellon's partnership with Circle for USDC creation and redemption illustrates the model. Banks can facilitate real-time cross-border settlement when traditional rails are closed, such as on weekends, holidays and after-hours, without owning the underlying infrastructure.

The trade-off is control for speed. Margin-sharing, dependency on partner compliance, and pricing, and limited differentiation are real constraints. Evaluate partners on regulatory licensing, operational resilience, and exit options. Treat this as a learning phase before deeper integration.

Option 3: state rails

Build on central bank digital currencies. This is the pragmatic choice in markets hostile to private stablecoins.

India is the clearest example. The RBI Deputy Governor has stated that stablecoins ‘carry huge risk of replacing currency and policy sovereignty’. Meanwhile, the e-Rupee pilot has expanded to 17 banks with over 6 million users and a circulation of INR 1,016 crore, a 334% rise from 2024. The strategic question for banks in India is whether e-Rupee will prove sufficient for global interoperability, or whether stablecoin access remains necessary for USD trade corridors. The honest answer is probably both.

Option 4: consortium model

Joint ventures that pool capabilities across banking, Web 3, and distribution. Standard Chartered's partnership with Animoca Brands and HKT formed Anchorpoint, a joint venture for an HKD-backed stablecoin that applied for HKMA licensing in August 2025. Japan's megabanks (MUFG, SMBC, Mizuho) launched Project Pax integrating SWIFT messaging with blockchain settlement. Consortia offer shared risk and access to capabilities no single institution possesses. The cost is governance complexity and slower decision-making.

PSPs: licensing as strategy

For payment service providers, the regulatory map is also the competitive map. Where you're licensed determines where you can operate, and the transition from registration to licensing regimes is creating moats that favour early movers.

The licensing moat

Singapore's MAS Single-Currency Stablecoin framework. Hong Kong's HKMA licensing regime effective August 2025. Australia's AFSL requirements for digital asset providers. Each creates barriers that advantage those who invested in compliance early.

Gateway markets first

StraitsX built on its Singapore regulatory footing, partnered with Thailand’s KASIKORNBANK, and is now integrating into payment platforms in Japan and Taiwan, with an expanded cross‑border settlement network between Singapore, Thailand, Taiwan and Japan slated for go‑live in Q2 2026.

This isn't regulatory arbitrage. It's regulatory sequencing — using gateway market credibility to accelerate regional expansion.

The embed decision

Build consumer-facing infrastructure, or provide settlement rails to existing platforms?

The Grab-StraitsX partnership shows one answer. A Web 3 wallet integrated within Grab's super-app. Stablecoin settlement across eight Southeast Asian markets. XSGD and XUSD for enterprise cross-border payments. The stablecoin is invisible to consumers; merchants receive local currency. The partnership model has the potential to scale faster than building consumer distribution from scratch in fragmented regional markets.

Corridor economics

Not all corridors are equal. Remittances from high-fee markets (6-8% traditional fees versus sub-1% stablecoin rails), B2B trade settlement (3-5 days versus minutes), freelancer and creator payouts across borders are the use cases where stablecoin economics are most compelling.

The Philippines illustrates the opportunity. High remittance volumes, a significant unbanked population, and regulators who are regulating rather than banning. Markets with all three characteristics deserve strategic focus.

The competitive landscape

Banks are moving deep into PSP territory. In Singapore, StraitsX issues SGD‑ and USD‑pegged stablecoins backed by reserves held with DBS and Standard Chartered, while Paxos’ MAS‑approved Singapore stablecoin uses DBS as its primary reserve custodian. In Hong Kong, Standard Chartered’s joint venture with Animoca Brands and HKT plans to issue an HKD‑backed stablecoin under HKMA’s new regime. In Japan, MUFG’s Progmat platform is linking megabanks MUFG, SMBC, and Mizuho into shared infrastructure for a yen‑pegged institutional stablecoin.

The window for PSPs to establish a position is narrowing. The best partnerships and regulatory relationships are being locked in now.

Banks and PSPs need to consider which corridors justify serious investment, which licensing regimes create opportunity versus friction, and how to build compliance capability that scales when no one yet knows which form of tokenised money will ultimately prevail, and interoperability remains the hardest problem to solve.

Merchants: the invisible rail

For most merchants in Asia-Pacific, the stablecoin question isn't whether to ‘accept crypto’. That framing misses the point entirely. The real question is whether your payment stack is becoming more expensive and slower relative to competitors who've modernised, and whether you'll notice until it's too late.

The thesis: you won't know you're using it

The most successful stablecoin deployments share a common characteristic. The merchant doesn't know they're using one.

In Singapore, Alipay+ and Grab, working with StraitsX, now let tourists pay at any GrabPay QR merchant using supported wallets like Malaysia’s Touch 'n Go; the shopper pays in ringgit, the merchant receives Singapore dollars, and XSGD handles FX and settlement in the background while the merchant just sees faster cash flow.

This is one model that has the potential for scale. Shopify’s June 2025 integration with Coinbase and Stripe means merchants across 34 countries can accept USDC through their existing Shopify checkout without requiring a new gateway or crypto wallet management. Customers pay from any compatible wallet on Base; merchants receive local currency by default, or can opt to hold USDC. Mastercard now enables stablecoin spending at more than 150 million merchant locations via its existing card network, by linking wallets’ stablecoin balances to virtual or physical Mastercard cards with automatic conversion at the point of sale. Stripe’s December 2025 rollout turns stablecoin payments into a configuration choice in its dashboard—merchants using Checkout or Payment Links can enable USDC payments on supported networks without changing their integration.​

These are examples of major infrastructure providers building stablecoin rails into products that merchants already use. Wait for a ‘crypto strategy’ and you may find you've been using stablecoin settlement for months without knowing it.

The economics

Traditional cross-border card payments layer interchange fees, network fees, acquiring bank fees, and FX spreads, often 4-6% on international transactions. Settlement takes 3-5 business days.

Stablecoin rails compress this. Shopify merchants accepting USDC pay their standard domestic Shopify Payments rate, with no extra foreign exchange or international fees, and many are eligible for a rebate of up to 0.5% on USDC orders, effectively lowering net acceptance costs. Settlement in minutes turns what used to be days of locked capital into working cash, which matters more than basis‑point differences for thin‑margin, high‑turnover merchants. Cross‑border payments and remittances still average roughly 6–6.5% in fees, especially on bank rails, a spread stablecoin‑based checkout is purpose‑built to attack.

Stripe's data shows that monthly stablecoin payment volume grew from under USD 2 billion to over USD 6.3 billion in two years. Cross-border payment fees currently average 6.4% of transaction value, a gap stablecoins are designed to close.

Where this matters most

Tourism-heavy markets see immediate benefit. Singapore's Grab-Alipay+ integration demonstrates the model at scale, with 16.5 million visitors in 2024, each a potential stablecoin-settled transaction the merchant never notices.

Cross‑border ecommerce is the next frontier. In Southeast Asia and neighbouring markets like South Korea and Japan, cross‑border ecommerce revenue is projected to grow roughly 70% to about USD 148 billion by 2027, outpacing domestic ecommerce growth. Stablecoin rails offer a single settlement layer across these fragmented markets, even as shoppers, merchants, and payment methods differ country by country.

B2B trade may be the largest opportunity. Chinese exporters and Southeast Asian wholesalers already accept stablecoins for faster settlement with overseas clients, even where not formally recognised.

The decision framework

Three questions for merchants evaluating their position:

What's your cross-border exposure? Domestic-only merchants can wait. Those moving money across borders through ecommerce, tourism, or B2B trade face economic challanges that are harder to ignore.

Who controls your payment stack? If you're on Shopify, using Stripe, or accepting cards through major networks, stablecoin rails are being built into your infrastructure whether you request them or not.

What's your cash flow sensitivity? High inventory turnover, thin margins, working capital constraints? Faster settlement matters. Comfortable cash positions? Perhaps not.

The merchants who get this right won't be the ones who ‘embraced crypto’. They'll be the ones who noticed when their settlement got faster, and their fees got lower — and had the sense to lean into it.

The common thread

Across banks, PSPs, and merchants, the strategic logic converges on four points:

Licensing is becoming a moat. The shift from registration to licensing regimes, as seen in Hong Kong, Singapore, and Australia, creates barriers that advantage early movers. Compliance capability is no longer a cost centre. It's competitive differentiation.

Stablecoin fluency is table stakes. Which stablecoins are licensed where, which reserve structures meet requirements, and which corridors work for cross-border settlement is now essential operational knowledge. The difference between ‘MAS-regulated’ and unregulated alternatives may determine market access.

CBDC integration planning starts now. Project mBridge, e-Rupee, and e-HKD are active pilots with commercial participation. If you're not engaging with sandbox programs, you're already behind.

Regulatory arbitrage has limits. The era of structuring operations to avoid licensing requirements is ending. FATF coordination, regional regulatory dialogue, and converging frameworks mean the direction is toward harmonisation. Long-term positioning requires engagement with regulatory frameworks, not avoidance of them.

The institutions that thrive won't be the ones that moved fastest. They'll be the ones who read the regulatory map correctly.

Conclusion: from innovation to implementation

The technology is ready. The regulatory frameworks are crystallising. The rails are being built, often invisibly, into the payment infrastructure that merchants and institutions already use.

And yet, for most participants in Asia-Pacific's payment ecosystem, fundamental questions remain unanswered.

For merchants: What real business problems do stablecoins solve? How do they reduce costs, speed settlement, or improve acceptance? What's practical to adopt today versus what remains experimental?

For banks and PSPs: Which corridors justify investment? Which licensing regimes create opportunity versus friction? How do you build compliance capability that scales across fragmented jurisdictions?

For policymakers: How do you enable innovation without importing systemic risk? How do you coordinate with regional peers when each market has different starting points?

The gap is between what's possible and what's practical, what's compliant and what's commercial.

Closing that gap requires collaboration through convening regulators and practitioners, publishing implementation guides that work across jurisdictions, creating forums where institutions building these rails can share what actually works. This is the work EPAA was built for and why initiatives focused on practical guidance, rather than advocacy or hype, matter more now than ever.

EPAA's Stablecoins for Merchants initiative is one example, where we are equipping merchants, policymakers, and payment providers with clear, neutral insight into stablecoins in digital commerce. We’re focused on guidance grounded in regulatory reality and commercial viability.

The institutions that thrive in APAC's next payment chapter won't be those who moved fastest or shouted loudest about Web 3. They'll be the ones who read the regulatory map correctly, build compliant infrastructure early, and understand that invisible rails still need visible standards.

The rules are being written. The rails are being laid. The question is whether you're at the table or reading about it afterwards.

About author

 

Monica Jasuja is Chief Expansion and Innovation Officer at the Emerging Payments Association Asia (EPAA), leading industry working groups on cross-border payments and tokenised money. She represents EPAA on the BIS PIE Task Force. Ranked among the top 3 global payment leaders and top 10 fintech voices worldwide, Monica brings 24+ years of experience across PayPal, Mastercard, and Gojek.

 

 

About Emerging Payments Association Asia (EPAA)

 

Emerging Payments Association Asia (EPAA) is the region's leading independent voice for the payments industry, convening banks, fintechs, regulators, and technology providers to shape the future of payments across Asia-Pacific. Through working groups, research, and advocacy, EPAA bridges the gap between policy and practice in an era of rapid digital transformation.