The Bank of Thailand (BOT), which is the apex bank in the county, has announced its project of developing a wholesale Central Banks Digital Currency (CBDC) using R3’s Corda platform. This information was revealed by the authorities in a press release published on August 21.
The CBDC is a virtual currency issued by the Bank of Thailand which is solely dependent on government regulations and laws in the determination of its legal status. But, the ‘wholesale’ variant of CBDC streamlined its use for financial institutions and market instead of a “retail CBDC” for the general populace.
The R3 Corda Platform
The suitability of the R3’s Corda must have been due to the fact that it is a DLT (Distributed Ledger Technology) platform which has been developed to function in the within the financial service to restrict data access to the targeted audience only.
Based on the publication, it appears that the bank of Thailand will be collaborating with about eight commercial banks in the country in order to execute the CBDC project. These banks include; Bangkok Bank Public, Krung Thai, Siam Commercial Bank, Standard Chartered Bank and HSBC. BOT commented on the partnership saying:
“Creating an ecosystem conducive for collaborative learning in technology will be an important driving force towards a digital future for the Thai financial sector.”
The Bank Thailand has reported described this as a “collaborative milestone” stating that the banks in this project would design and build the proof-of-concept milestone CBDC prototype, this first stage which is expected to be completed by the first quarter of 2019.
This project, according to the Bank of Thailand, is designed and developed to “enhance the efficiency of the Thai financial market infrastructure” and to contribute to the design of its future expansion. The apex bank recently revealed its intention to use blockchain technology in various financial services in a bid to integrate the innovation into its economy.
In the announcement, it was further stated that in addition to Project Inthanon, the Bank of Thailand is “conducting a DLT (distributed ledger technology) proof of concept for scripless government savings bond sale to improve operational efficiency.”
Central Bank Digital Currency Gaining Grounds
The Central Bank Digital Currency has continued to gain acceptance though divided opinions still exist within the banking sectors around the world. R3’s research director, Anthony Lewis reportedly predicted that the efforts to develop wholesale CBDCs would skyrocket in 2018, simply because a sizeable amount of institutions have started to explore and exploit the tremendous potentials and benefits that could be reaped through their distribution.
In March, retail CBDC gained a more considerate response. For example, the Bank for International Settlement BIS to stated that; “a general purpose [retail] CBDC could give rise to higher instability of commercial bank deposit funding” and also potentially fuel faster banking activities, the Bank of England also noted this in May. Countries like India, Switzerland, Iran, the Eastern Caribbean, the Marshall Islands and many others are reportedly considering the idea as well.