One would be hard pressed to find any market in East Asia except the Philippines where startups are major digital banking players. In one jurisdiction after the next, regulators have ensured that incumbent lenders and in some cases large technology companies win the requisite licenses to operate online-only banks.

Japan’s largest banks are increasingly looking to fintech opportunities in Asia’s emerging markets as an avenue for growth, as their home market is mature, a laggard in digital transformation and constrained by the  world’s greyest population. In contrast, much of Southeast Asia as well as India still have plenty of low-hanging fruit, whether in the payments segment, banking, or both.

In the battle of Southeast Asia’s platform companies, the one that never declared itself a super app is edging out the others in digital financial services. Despite a slowdown in its gaming arm Garena, Sea Group is growing expeditiously in the e-commerce and fintech segments, a proven synergistic combination if we ever saw one. Just look at Taobao and Alipay. It’s just a more compelling one-two punch than trying to turn a ride-hailing app into a bank like Sea’s competitors are set on doing.

In Asia Pacific, Japan is taking a proactive position on stablecoin regulation much as it has other elements of cryptocurrency rules since 2017. New regulations are expected to come into effect in June, while Japanese banks recently began a stablecoin experiment on an Ethereum public chain. Though certain crypto fundamentalists decry Japan’s stablecoin regulations as overly restrictive, in reality, the alternative is unattractive. UST’s spectacular implosion last year and the subsequent criminal charges brought by the United States Securities and Exchange Commission against Terraforms Labs founder are a pointed reminder of what happens when stablecoins are left entirely to “market forces.”

It is no exaggeration to say that India’s United Payments Interface (UPI) real-time payments system has been a game changer for the subcontinent. In a nutshell, UPI has transformed how Indians make payments, allowing them for the first time to easily transfer money instantly from one bank account to another: from a customer to a business, or between individuals.

In the roughly seven years since it was launched, UPI has accrued 260 million users in a population of 1.4 billion and been a decisive factor in India’s embrace of cashless payments thanks to its ease of use and interoperability. Mastercard’s 2022 New Payments Index found that Indians are the most willing of any consumers in the Asia-Pacific region to use emerging cashless payment methods with 93% likely to have made such a payment in the past year.

While many fintech success stories have come entirely from the private sector, state-backed UPI shows that public-private digital financial inclusion efforts can bear fruit when they are implemented well. Having achieved dominance at home, UPI now has set its sights on global expansion.

The question is: Can what works for digital payments in India work globally?

While most digital banks struggle to make money, South Korea’s are largely profitable. They have been able to scale up quickly, despite negligible financial inclusion needs. According to the World Bank, almost 99% of South Koreans have a bank account. The factors that have made Kakao Bank, K Bank and Toss Bank successful are unique to South Korea and are unlikely to be replicated elsewhere.

The largest U.S. payments firms have had their eyes on the China market for decades, in some cases since the country kicked off economic reforms in 1978. They have waited with the utmost patience to gain access to the colossal Chinese payments and cards market, valued at US$21 trillion in 2021 by research firm Global Data. In recent years, American Express and PayPal have made some incremental progress in the China market as Beijing has gradually permitted more foreign investment in its payments sector.

At long last, Taiwan plans to adopt some basic cryptocurrency regulations beyond requiring crypto firms to adhere to existing anti-money laundering legislation. The Financial Supervisory Commission (FSC) will be responsible for the regulations, though the extent of its role has yet to be decided. In all likelihood, the FSC will continue to take a hands-off approach to decentralized digital currencies due to its limited understanding of them and preference to not get heavily involved in a segment of financial services that remains well outside of the mainstream in Taiwan and thus with relatively few ties to the banking system.

It’s been a long and humbling road for Ant Group since the abrupt cancellation of its expected blockbuster IPO in November 2020. The nixed IPO marked the beginning of a wider crackdown by the Chinese authorities on tech giants that had gotten too big for their own good. Since then, we have strained to read the tea leaves and figure out just how much Ant would be cut down to size when the IPO could get back on track. The decision by regulators to require Ant’s parent company Alibaba to become a holding company divided into six different business groups suggests that the restructuring of the internet giant has reached an inflection point.

Defining atomic settlement

Atomic settlement refers to exchanging assets between two parties in a single transaction, typically instantaneously and often without intermediaries. This can be particularly useful in cross-border payments, as it allows for faster and cheaper transactions compared to traditional methods that rely on a more comprehensive network of correspondent banks or other financial institutions to facilitate the transfer.