Thailand’s central bank chief has confirmed research into a number of blockchain applications in banking including Project Inthanon involving a central bank digital currency used for interbank settlements.
In a speech [PDF] centered on Thailand’s economy at a financial summit in Singapore on Tuesday, Bank of Thailand (BoT) governor Veerathai Santiprabhob revealed a broad effort to research and trail blockchain technology in various financial applications including supply chain, bond issuance and letters of guarantee.
The central bank chief notably touched on “another project in the pipeline” involving a wholesale central bank digital currency (CBDC) based on blockchain technology.
Dubbed Project Inthanon, the endeavor will see the central bank develop the CBDC to enable faster and cheaper settlements between banks on the domestic interbanking system using the tokens.
“[T]he Bank of Thailand and banks will co-develop a new way of conducting interbank settlement using wholesale central bank digital currency or CBDCs,” BoT governor Santiprabhob said.
The central bank chief insists that the authority will first explore the “potential and implications” of a central bank digital currency before any roadmap to put to wider use.
Underlining the advantages of a blockchain-based central bank cryptocurrency, he stated:
“Like other central banks, our goal is not to immediately bring CBDC into use, but rather to explore its potential and implications for back office operations. These efforts should pave way for faster and cheaper transaction and validation due to less intermediation process needed compared to the current systems.”
Furthermore, the official indicated that a proof-of-concept project involving bonds issued over a blockchain was nearly complete with production to begin in “the near future”. The solution is expected to “speed up saving bond allocation to retail investors from 15 days to 2 days”. A separate project sees the central bank exploring the decentralized innovation in supply chain finance.
The research and development effort stems from a working group that sees 14 Thai banks, the central bank and seven state-owned enterprises and corporate giants collaborate under the ‘Thailand Blockchain Community Initiative’. Established in March 2018, the working group’s first pilot saw Thailand’s big four banks share a blockchain platform to issue electronic letters of guarantee over the ledger. Following testing in the central bank’s regulatory sandbox, a real-world launch is expected in September this year.
Baht coins image from Shutterstock.