Asia Pacific’s ascent—and its uneven terrain - Trade Treasury Payments

Fifteen years ago, China’s economy was roughly two-and-a-half times smaller than America’s in nominal terms (about US$6.1tn vs US$15.0tn in 2010). 

Today, that gap has narrowed markedly, even as trend growth moderates. 

Across the wider region, developing Asia is still the world’s growth engine: the Asian Development Bank (ADB) projects ~4.8% regional growth in 2025–26, even after tariff shocks and a choppy global cycle. 

Several of the fastest-growing mid-size economies in the world this year and next are here: Viet Nam, the Philippines, Cambodia, Mongolia and Uzbekistan are all forecast to expand briskly.  

But growth is not a synonym for stability. 

The region’s political and economic terrain remains jagged. Sri Lanka is still emerging from sovereign default. Bangladesh is under an IMF programme with growth and inflation pressures in flux. Myanmar remains diplomatically isolated, and Cambodia, Pakistan, and Papua New Guinea are navigating the uncomfortable trade-off between external debt and infrastructure-led growth. 

Meanwhile, intensifying heatwaves, typhoons, and crop disruption threaten to undermine even the most robust growth projections.

The regional turn

Asia is integrating. On its own terms.

As the US and China recalibrate ties, and as supply chains “slobalise”, Asia is rewriting trade rules, modernising legal plumbing, and rewiring its payments rails. The ASEAN Digital Economy Framework Agreement (DEFA) is slated for substantial conclusion by the end of the year, an attempt to codify common rules for data, trust, and digital trade at a regional scale.

In payments, five ASEAN central banks plus India have agreed to move Project Nexus toward live implementation to link national instant-payment systems, with Bank Indonesia observing. 

Cross-border QR and fast-payment linkages, like PromptPay in Thailand, are already live or piloting across multiple ASEAN corridors, reducing frictions for SMEs.  

Regulators are also creating sandboxes for tokenised money. Singapore has finalised a regime for single-currency stablecoins; Hong Kong’s Stablecoin Issuers Ordinance enters into force on 1 August 2025, with licensing to follow. At the wholesale end, the BIS’s mBridge has reached an MVP stage for multi-CBDC cross-border settlement.

A final, often-misunderstood point: even as new rails emerge, today’s USD flows still run primarily over correspondent networks and US clearing systems; they do not detour through exotic jurisdictions. The policy challenge is to complement (and, where possible, interlink) those rails with faster, programmable options.

The 7 shifts that matter

Since launching in April 2025 we’ve reported from 14 Asia-Pacific markets, from Thailand’s move to modernise electronic contracting law to the reopening of USD correspondent lines in Mongolia, and from greener supply-chain pilots in Dhaka to India’s GIFT City build-out for cross-border finance.

1. Digital trade is becoming regionally native

The ASEAN Digital Economy Framework Agreement (DEFA) – which is currently under consultation – aims to be the world’s first region-wide digital trade accord. With ASEAN’s digital economy projected to triple to $1 trillion by 2030, this framework will underpin regional interoperability. Meanwhile, tokenised instruments like Singapore’s blockchain-issued commercial paper and Hong Kong’s digital gold are already operational.

2. Cross-border real-time payments are replacing nostro dependency

Six ASEAN nations are now linked through QR code payment interoperability. BIS’ Project Nexus is live-testing integrations between Singapore’s FAST, India’s UPI, Malaysia’s DuitNow, and others. For corporates, this reduces FX friction and enhances cash visibility, while regulators build the region’s own answer to SWIFT.

3. The trade-tech-finance triangle is closing

Asia’s banks are retooling. In Indonesia and the Philippines, onshore FX hedging and local liquidity facilities are being tailored to volatile importers. Fintechs like Validus are embedding SME finance into logistics platforms. Even traditional lenders are piloting smart contracts and dynamic invoice discounting.

4. ESG is still elusive for smaller exporters

Compliance is no longer optional, but fragmented ESG taxonomies are a barrier for SMEs. Our coverage of the ADB-ITC SME Sustainability Toolkit reveals how AI-driven coaching and automated ESG scoring are on-ramps for green-linked finance. Still, the gap between aspiration and access is wide.

5. Friendshoring is rewiring supply chains, not just headlines

ASEAN has become a friendshoring engine. Viet Nam now hosts over 650 Apple suppliers. India’s trade with Southeast Asia has doubled in five years. However, supply chain diversification demands more than customs corridors; it requires local FX, working capital, and trade risk infrastructure.

6. Frontier markets are becoming geopolitical swing states

From Uzbekistan’s rare-earth corridors to the Pacific Islands’ remittance rails, smaller markets are no longer footnotes. Japanese capital, multilateral de-risking tools, and new payment infrastructures are making these economies pivotal. The question is no longer whether they will rise, but whether banks and corporates are structurally ready to support them.

7. Law, not innovation, will determine who leads

Digital Bills of Lading. MLETR alignment. Trust frameworks. Asia is rich in pilots but patchy in law. As our reporting on the ICC DSI legal roadmap makes clear, adoption without enforceability is a cul-de-sac. Regulatory convergence, not token ‘launches’, will decide the digital trade arms race winners.

The bigger picture

This isn’t just about efficiency. It’s about security, both economic and institutional. In a world where interdependencies have become vulnerabilities and where payment systems are strategic assets, Asia Pacific’s path is about resilience, autonomy, and institutional clarity in a landscape defined by economic warfare, not equilibrium.