Vietnam and Laos have launched a framework for local currency settlement and cross-border QR code payment connectivity, the State Bank of Vietnam (SBV) and the Bank of the Lao P.D.R. (BOL) said on Friday.
The duo said in a statement following the launching ceremony that under the leadership of the leaders of the parties and the Prime Ministers of the two countries, the SBV and the BOL, together with the commercial banks of Vietnam and Laos had actively coordinated to promote the use of the local currencies in payment transactions, money transfers, investment and credit relations between the two countries.
These had been done through the two initiatives/projects, i.e. the bilateral retail payment connectivity using QR code, and the development of a framework to promote the use of local currencies in payment transactions and money transfers for bilateral trade, investment and credit relations.
Based on the reliable and comprehensive cooperation between Vietnam and Laos, the promotion of the use of local currencies in payment transactions and money transfers for trade, investment and credit relations between Vietnam and Laos is expected to bring about practical benefits to both sides.
This is providing the two countries’ businesses with more options for transaction currencies and reducing their operating costs, thereby creating more favorable conditions for the businesses to access capital resources in local currencies, especially for Vietnamese companies and investors in the Lao P.D.R.
At the ceremony, SBV Deputy Governor Pham Tien Dzung reviewed the positive results achieved by the two central banks on local currency settlement cooperation in 2024, including the promulgation and improvement of the related legal frameworks in the two countries.
This is including the circular of the SBV providing guidance for the bilateral payment and money transfers with the Lao P.D.R., which allows all Vietnamese commercial banks to implement the payment relations using the local currencies with the Lao P.D.R., and the Decisions of the BOL Governor granting licenses to the commercial banks to act as Appointed Cross Currency Dealers (ACCD) for the local currency settlement between Vietnam and Laos.
Also at the ceremony, BOL Deputy Governor Soulysak Thamnuvong handed over the BOL Governor’s Licenses to the Lao-Viet Joint Venture Bank and Vietcombank Laos to participate in the local currency settlement.
With the improved legal frameworks and infrastructure in the banking sectors for the settlement and money transfers between Vietnam and Laos recently, he said the two sides had agreed to encourage the businesses to use their local currencies in trade and investment activities between the two countries.
This project is expected to promote the bilateral tourism, consumption, and people-to-people exchanges between the two countries, encouraging the use of the local currencies in the bilateral retail payments.
According to the statement, the cross-border payment connectivity service using QR codes aims at providing a cheaper, faster, safer and more convenient payment means to the people, visitors and traders in both countries.
It is the outcome of the SBV-BOL cooperation since 2023 through the National Payment Corporation of Vietnam (NAPAS), the Lao National Payment Network Company Limited (LAPNet), as well as the commercial banks, by now, the two sides have completed the payment connection for Vietnamese customers when purchasing goods and services in Laos.
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