BANK OF THAILAND SEEKS TO CREATE DIGITAL CURRENCY FOR INTERBANK SETTLEMENT


The bank of Thailand plans to adopt blockchain technology in various banking applications including interbank clearance and settlement system.

The central bank governor of Thailand, Veerathai Santiprabhob, has confirmed research into blockchain applications in banking including Project Inthanon which involves a central bank digital currency used for interbank settlements. In a speech, at a financial summit in Singapore on Tuesday, the governor stated:

“Another project in the pipeline is the ‘Project Inthanon’ in which the Bank of Thailand and banks will co-develop a new way of conducting interbank settlement using wholesale central bank digital currency or CBDCs. 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.”

Earlier, in march, Thailand Blockchain Community Initiative was officially announced at the Bangkok FinTech Fair . This initiative is a collaboration between 14 Thai banks and 7 leading businesses and state-owned enterprises to utilize blockchain technology in financial services, starting with a pilot project to offer blockchain-based letters of guarantee. This project, according to Veerathai, is expected to become operational in the second half of this year. Speaking further, he explained:

“On a longer horizon, the blockchain technology is also planned to be applied to supply chain finance to improve authentication efficiency which would facilitate real sector activities.”

He also stated that “Other blockchain related projects in the pipeline include scriptless bond issuance which would significantly speed up saving bond allocation to retail investors from 15 days to 2 days, as well as granting more flexibility for bond issuers.”