The Two-Trillion-Dollar Question: Is Southeast Asia Ready to Realize DEFA's Promise?

ASEAN’s completion of the Digital Economy Framework Agreement (DEFA) marks a significant step toward deeper regional digital integration, with the potential to expand the region’s digital economy to US$2 trillion by 2030. The agreement aims to harmonize regulations, lower compliance costs, and improve cross-border digital trade, payments, and data governance, creating greater opportunities for businesses, particularly MSMEs. However, realizing these benefits depends on effective implementation, stronger digital governance, cybersecurity, and regulatory coordination. Progress in regional payment connectivity demonstrates that sustained institutional cooperation can translate ambitious regional commitments into tangible economic outcomes.

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