The second initiative is the promotion of regional currency usage for trade settlement and direct investment in our region. As we all know, regional currencies tend to move together and volatility of advanced countries’ currencies will continue to be high. The Bank of Thailand and the PBOC have been promoting the use of Thai Baht and Renminbi for bilateral trade settlement between Thailand and China. We have a THB/CNY bilateral swap agreement in place since 2011 with a Chinese bank serving as the Clearing Bank for Renminbi in Thailand since 2015. Additionally, the Bank of Thailand has worked with several central banks in the region to relax relevant foreign exchange regulations with a view to promoting the use of regional currency. Our local currency framework with Malaysia became operational in 2016. Discussions with Cambodia, Laos, and Indonesia are underway. Thus far, ASEAN countries have undertaken a number of initiatives to upgrade our financial infrastructure, but most of these initiatives are aimed for domestic usage. Much work remains to enhance closer financial connectivity at the regional level. Allow me to propose three key areas to strengthen our regional financial connectivity. The intended outcomes of these initiatives are to raise productivity, build immunity, and increase financial inclusivity for sustained benefits. 2  First, we need to embrace innovative financial technology to raise productivity. The rapid pace of technological innovations has changed how we trade and how financial transactions are conducted. Alipay and WeChat Pay have demonstrated the power of modern payment services in China.

In Vietnam, consumers use OnePay to make financial transactions. Wing in Cambodia, BCEL in Laos and Wave Money in Myanmar provide instant payments and money transfers through mobile phones to those without bank accounts. Last but not least, Thailand’s PromptPay provides consumers with one of the most efficient fund transfer services in the region, using mobile phone or citizen ID numbers as a proxy for bank account numbers. The Bank of Thailand also set up a “regulatory sandbox” framework to support development of financial innovations. This framework allows innovators to test their products, and regulators to develop necessary regulatory requirements before innovative products are launched to the public. Nevertheless, embracing financial technology at the domestic level is not enough. We need to create linkages among domestic payment platforms and innovative financial products to facilitate cross-border financial activities. Thailand has been active in enhancing inter-platform linkages. On a bilateral level, Thai banks and FinTech firms are developing cross-currency remittance services based on blockchain technology. At the regional level, Thailand’s national interbank payment system has recently been selected to be the hub of the Asian Payment Network (APN). Ladies and gentlemen, As we all know, FinTech comes with new risks. Cyber threats, in recent years, have increased dramatically in frequency, sophistication and impacts. This leads to my second area of cooperation. AFCA members may wish to cooperate to build immunity to lessen the impact of unwarranted risks. Among others, AFCA could serve as a forum to ensure that cooperation on cyber security is brought to fruition.