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Bank of Thailand Set to Launch R3 Tech-Based Digital Currency Early Next Year

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The first phase of the Bank of Thailand’s wholesale Central Bank Digital Currency (CBDC), which will be used for interbank fund transfers, is expected to have been developed by the first quarter of next year, says the central bank.

In a press release, the Bank of Thailand stated that it has partnered with eight commercial banks in the country in a bid to create a CBDC based on Corda, a distributed ledger technology (DLT) platform developed by the enterprise-focused consortium startup R3.

The project, referred to as Project Inthanon Phase 1, will design, develop and test a proof-of-concept prototype for domestic wholesale fund transfers by using wholesale CBDC, the central bank reported in the release.

The eight participating banks are Bangkok Bank, Krungthai Bank, Bank of Ayudhya, Kasikornbank, Siam Commercial Bank, Thanachart Bank, Standard Chartered Bank Thai and HSBC.

The central bank, the eight banks and database firm R3 are exploring the implications and potential benefits of distributed ledger technology (DLT) to enhance efficiency in the Thai financial market. The bank announced the projected deadline as follows:

Project Inthanon Phase 1 is expected to be completed by the first quarter of 2019 after which the BoT will publish a project summary accordingly,

The project first came to light in June when the central bank’s governor indicated that that they were in the initial stages of the concept. In a speech, the governor said that they were exploring the potential of blockchain for facilitating cross-bank transactions as an initial trial, before it could be formally launched on a larger scale.

Joining the Fray

CoinDesk reports that project Inthanon is similar to developments carried out by other central banks, including the Bank of Canada, the Hong Kong Monetary Authority and the Monetary Authority of Singapore.

Apart from Project Inthanon, the central bank is conducting a blockchain technology proof-of-concept for scripless government savings bond sales, to improve operational efficiency.The project is expected to “speed up savings bond allocation to retail investors from 15 days to 2 days”.

Commenting on the project, Bank of Thailand governor Veerathai Santiprabhob said that the project was started to keep up with the technological changes, which have major impacts on the efficient delivery of financial services.

He stated:

The Bank of Thailand and local financial institutions agreed to launch a project to raise technological readiness in adopting new financial technologies to enhance operational efficiencies. Creating an ecosystem conducive for collaborative learning in technology will be an important driving force towards a digital future.

In March 2018, the Thailand Blockchain Community Initiative was launched, bringing together Thai’s large banks, state-owned enterprises, corporate giants and the central banks. The working group has been piloting various blockchain-based initiatives that are meant to enhance efficiency.

Image Credit: Deposit Photos

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