In the latest in a series of innovations to improve cross-border payments for Asian businesses, Ant International, previously part of Ant Group, an affiliate of China’s e-commerce giant Alibaba Group which operates China’s ubiquitous mobile payments app Alipay, has just integrated a new FX blockchain settlement process that supports FX liquidity in an environment where currency exchange rates can be volatile, and fluctuations can have a significant impact on the value of cross-border payments.
“By overcoming limited settlement windows and currencies, onchain FX settlement is revolutionising cross-border payments to achieve new economic efficiencies, especially for complex markets in Asia,” said Kelvin Li, General Manager of Platform Tech at Ant International. “With this milestone, we aim to enable more secure, reliable and transparent real-time cross-border payments solutions for businesses of all sizes across travel, trade and commerce sectors in this region and beyond.”
The latest innovation involved Ant integrating J.P. Morgan’s Kinexys Digital Payments into its blockchain-based treasury management platform for FX transactions. It follows on from a suite of other headline-grabbing initiatives at the company which has tripled payment volumes and doubled SME lending, reaching 11 million customers in emerging markets, according to recent estimates from FinTech magazine. The company partners with banks including Deutsche Bank, Barclays and HSBC to advance blockchain, tokenised deposits, and cross-border settlement capabilities.
For example, Ant International recently integrated its AI-driven Falcon transformer model (a Large Language Model, LLM, that captures complex patterns and predicts future data points with high accuracy) with banking partners like Citi and Standard Chartered to enable over 90% forecasting accuracy for FX. The technology helps businesses mitigate costs and FX volatility when transacting across borders and has slashed hedging costs by up to 30% in sectors like aviation.
In another innovation supported by Swift infrastructure, the digital payments group and Standard Chartered have launched live production trials for a bank-to-wallet payment solution using the ISO 20022 financial messaging standards.
“We are pleased to be the bank of choice to conceptualise, test and deliver this innovation. It is testament to the versatility of our banking platform and our strategic relationship with both Swift and Ant International. We will continue to push the boundaries of finance to shape the future of our industry, securely and in compliance with regulatory requirements,” said Michael Spiegel, Global Head of Transaction Banking, Standard Chartered, speaking at the time.
Last year, the company partnered with BNP Paribas to enhance cross-border payment solutions for merchants and consumers in Europe, and the company has signed a three-year deal with UK football club Tottenham Hotspur as its official global payment solutions and digital wallet partner.
Elsewhere, Ant International has recently announced plans to set up a fintech platform in Turkey with e-commerce platform Trendyol, defence firm Baykar, and ADQ, part of the Abu Dhabi sovereign wealth fund. The Memorandum of Understanding (MOU) targets digital services for SMEs, merging e commerce infrastructure with fintech and AI capabilities.
Push into Stablecoins
Ant International has also confirmed plans to apply for a fiat referenced stablecoin issuer license in Hong Kong. Alongside Ant Group’s blockchain focused subsidiary Ant Digital Technologies, Ant International has already held discussions with Hong Kong regulators, and is participating in the Hong Kong Monetary Authority (HKMA) stablecoin sandbox, Project Ensemble, as part of its application strategy.
With cryptocurrencies still banned in mainland China, Ant is among the groups lobbying to launch renminbi-pegged stablecoins via regulated entities in Hong Kong which, unlike the mainland, is forging ahead with a framework. In August, the city’s Stablecoins Ordinance took effect under which businesses can obtain a licence from the HKMA to issue tokens and harness stablecoins for cross-border payments and improved treasury management.
Ant’s growth and innovation comes after the future of the lending and payments business was thrown into doubt when Chinese regulators halted the $37bn listing of Ant Group in Shanghai and Hong Kong in 2020. The company was restructured, and Ant International was established to oversee four fintech business units: Alipay+, Antom, WorldFirst and Embedded Finance.
Ant is in the process of securing a financial holding company licence, which, once obtained, could facilitate the revival of its initial public offering (IPO) goal.
