China and Indonesia have launched a new cross-border QR payment system, marking the latest step in Beijing’s drive to build a regional digital payments network as it pushes to internationalise the yuan and reduce dependence on the US dollar.

Users can now use domestic mobile apps – such as China’s Alipay and Indonesia’s QRIS – to scan QR codes and make retail payments in either country using their home currencies.

Alicia Garcia-Herrero, chief economist for the Asia-Pacific region at French investment bank Natixis, said the move was a practical step towards deeper financial ties that would reduce transaction costs and currency risks for both sides.

“For Beijing, the primary drivers appear to be advancing dedollarisation efforts, promoting the international use of the yuan and strengthening economic integration with key Asean partners amid broader geopolitical pushes for financial autonomy,” she said.

Indonesia’s central bank announced the launch of the initiative on Thursday, according to reports by local news outlet The Jakarta Globe and Chinese state-run news agency Xinhua. It comes as Beijing has stepped up financial connectivity across Asean, its largest trading partner in bloc terms, in recent months.

In Thailand, Chinese visitors have been able to use domestic digital wallets to pay local merchants in yuan since late October. Visitors to Vietnam have been able to pay through UnionPay since December, with the initiative expanded last month to include Alipay. Similar services are in place in Malaysia and Singapore.

Garcia-Herrero said Beijing was likely to introduce similar arrangements with more members of the Association of Southeast Asian Nations and other partners this year, as it continues to extend its digital and financial footprint.