The Politics of International Cooperation in Cross-border Digital Payment Connectivity: A Case Study of QR Payment System in ASEAN

This research aims to explain the dynamics of cross-border digital payment connectivity in Southeast Asia, focusing on the political-economic origins of ASEAN cooperation in the cross-border QR-payment system. Under Indonesia’s chairmanship in 2023, ASEAN concluded cooperation that allows QR-code-based payment systems to be the regional digital payment connectivity. This system will also support the local currency settlement (LCS) mechanism that enables any transaction in ASEAN member states’ respective currencies, bypassing the use of the US dollar. A cheap and seamless system that matches the rising trend of smartphone users in this region will enable financial inclusion and stimulate the economy, business, and development. Using the theory of complex interdependence and an interpretive case study design, this research argues that this cooperation can be made possible due to ASEAN’s institutional design that brings a non-military approach and enables all related stakeholders to pioneer the cooperation through multiple intra-regional channels. In addition, ASEAN stakeholders can link this cooperation with its institutional geostrategy to respond to the geopolitical rivalry while maintaining ASEAN’s vision and centrality for the region. This research will contribute to discussing ASEAN’s contemporary geopolitics and geo-economy, particularly how intra-regional financial-monetary cooperation can be perceived as an institutional geostrategy.