Alibaba’s global business-to-business platform is moving to streamline cross-border payments by using tokenized versions of major currencies, part of a broader shift toward blockchain-based settlement in global commerce.
Kuo Zhang, president of Alibaba.com, told CNBC that the platform plans to start using tokenized deposits backed by fiat currencies such as the US dollar and euro. The technology, which it will build in partnership with JPMorgan, is designed to speed up transactions and reduce the number of intermediaries needed for international payments.
In today’s cross-border trade, a U.S. buyer sending dollars to a Chinese supplier may see funds funneled through multiple banks and undergo multiple currency conversions, adding time and costs. With tokenized currency, a digital version of that dollar could be transferred directly through a blockchain-based system, bypassing middlemen.
Alibaba.com will use JPMorgan’s blockchain-based JPMD infrastructure, a system designed to move tokenized deposits between institutional clients. Unlike stablecoins, which are typically issued by non-banks and backed by assets such as Treasuries, tokenized deposits sit on the balance sheet of a regulated bank.
Zhang said the company is also exploring the possibility of adopting stablecoins in the future, but will first focus on digital tokens issued by banks to ensure regulatory and operational clarity.
