Multi-currency stablecoins could strip out billions of dollars in foreign-exchange costs from Asian trade by removing the need for repeated conversions through the US dollar, according to Ratio CEO John Cho.
Cho, who also serves as chief stablecoin officer at the Kaia DLT Foundation, believes a coordinated network of local-currency and US dollar-pegged stablecoins can significantly reduce the “hidden tax” created by legacy cross-border payment systems, particularly across East and Southeast Asia.
He argues that while global trade finance is still dominated by the US dollar, day-to-day business in the region is overwhelmingly conducted in domestic currencies – from South Korean won to Singapore dollars – and that routing those flows via dollar intermediaries often leads to expensive double FX conversions and exposure to currency volatility.
Asia’s ‘multibillion-dollar’ working capital drag
For decades, international payments have run on correspondent banking relationships, pre-funded Nostro and Vostro accounts, and settlement systems constrained by time zones and banking hours. Cho says that in Asia these frictions now amount to a multibillion-dollar drag on working capital, with firms facing multi-day settlement delays and significant FX slippage.
US dollar stablecoins such as USDT and USDC, he notes, have already proved that digital assets can be used effectively for settlement. However, he insists they address only part of the problem because regional commerce still needs to be settled in local money.
Across markets in Southeast and East Asia, companies typically pay suppliers, settle regional invoices and fund operations in their respective domestic currencies. When those flows are forced through the dollar, extra FX costs are added on top, even where the underlying economic activity is entirely local or regional.
‘Not an either-or scenario’ for the dollar
Cho positions his approach as complementary to, rather than in competition with, the dollar’s role in global finance.
“I don’t think this is an either-or scenario,” Cho says. “USD stablecoins will continue to dominate global liquidity because the dollar remains the world’s reserve currency, but real commerce happens in local currencies. What we’re seeing is the emergence of a multi-currency stablecoin ecosystem. Local currency stablecoins complement USDT and USDC by eliminating unnecessary FX conversions and enabling domestic settlement.”
From his dual role at Ratio and Kaia, Cho is attempting to build the infrastructure for that ecosystem. Ratio provides chain-agnostic settlement rails, while Kaia is a unified Layer 1 network formed from the merger of Kakao’s Klaytn and LINE’s Finschia. Together, they aim to reduce friction on regional cross-border transactions by allowing different currency stablecoins to interact seamlessly.
Cho stresses that the objective is not to drain liquidity from existing dollar-based pools, but to create interoperable rails on which multiple digital currencies – including local stablecoins – can move efficiently across borders.
Unlocking capital tied up in Nostro/Vostro
A key inefficiency he targets is the scale of cash locked in pre-funded Nostro and Vostro accounts that banks must maintain worldwide. These idle balances consume substantial working capital yet offer limited flexibility, especially outside market hours or over weekends when liquidity is scarce.
On-chain FX “orchestration layers” offer a different model, operating as regulated middleware between institutions. Platforms such as Ratio run 24/7, using proprietary on-chain liquidity within permissioned settings to support continuous settlement.
By collaborating with local stablecoin issuers and market makers, these systems can rebalance flows across multiple routes, combining internal reserves with new token minting pathways. That structure is designed to allow near-instant execution even when traditional fiat payment ramps or banking channels are shut.
Winning over cautious treasurers
Despite the potential gains in capital efficiency and speed, Cho acknowledges that persuading conservative corporate treasurers to move away from familiar banking channels has been challenging.
To address this, Web3 infrastructure providers are now focusing less on disruption and more on incremental integration. Rather than demanding a wholesale overhaul of internal systems, orchestration layers are being built to plug directly into existing ERP platforms and treasury tools.
In practice, this means that on-chain settlement can operate invisibly behind standard payment gateways, with enterprises able to route only selected transactions over blockchain rails. Over time, firms can then shift larger volumes where they see verifiable improvements in cost, speed and FX slippage.
Regulatory clarity as the tipping point
Cho argues that the decisive factor for institutional adoption will be clear and stable regulation. For years, uncertainty over compliance obligations and how digital assets should be classified left many traditional companies wary, fearing “regulation by enforcement”.
That picture is now changing as global standard-setting advances. In the United States, progress around the CLARITY Act is providing more concrete legal definitions for digital commodities, securities and payment stablecoins, replacing what Cho sees as ambiguous rule-making with statutory clarity.
He believes this emerging framework offers a reference point for other jurisdictions and is helping to drive what he describes as a legislative tipping point in key Asian markets, where regulators are rapidly drawing up their own stablecoin rules.
“Large-scale adoption will only happen when stablecoin infrastructure demonstrably outperforms existing rails without requiring companies to compromise on compliance,” Cho says. “We are seeing this regulatory tipping point unfold rapidly in Asia, where we expect every major country to pass some form of stablecoin legislation into law over the next 12 to 24 months.”
Towards an ‘invisible’ settlement layer
Looking ahead, Cho expects the boundary between traditional fiat money and digital assets to fade as regulated stablecoins are embedded into national payment systems and recognised as native instruments for settlement.
If that happens, he says, the current frictions of moving between bank-led payment networks and blockchain environments will gradually disappear. In his view, payments will simply occur on-chain, with stablecoins functioning as an unseen settlement layer underneath global commerce – including the vast intra-Asian trade flows he wants to make cheaper and faster.
