The Bank of Thailand (BOT) has unveiled plans to develop a proof-of-concept digital currency prototype.
Image: Bank of Thailand and eight participating banks will develop proof-of-concept digital currency prototype. Photo: courtesy of mapichai / FreeDigitalPhotos.net.
The BOT, along with local financial institutions, will launch a project to advance the Thai financial sector’s technological expertise in adopting new financial technologies to enhance operational efficiencies.
Thailand’s major bank has collaborated with technology firm R31 and eight participating banks to launch Project Inthanon, which will study the implications and the potential benefits of distributed ledger technology (DLT) to enhance efficiency of the Thai financial market infrastructure.
Eight banks include Bangkok Bank Public Company, Krung Thai Bank Public Company, Bank of Ayudhya Public Company, KasikornbankPublic Company, Siam Commercial Bank Public Company, Thanachart Bank Public Company, Standard Chartered Bank (Thai) Public Company and The Hongkong and Shanghai Banking Corporation.
The BOT and the participating banks will involve in the designing and development of a proof-of-concept prototype for wholesale funds transfer by issuing wholesale central bank digital currency (Wholesale CBDC).
Corda, a DLT platform developed by R3, will be used for the development of the prototype.
The outcome and insights from Project Inthanon will be used for the designing of Thailand’s future financial market infrastructure.
The project is in line with similar projects undertaken by other central banks such as the Bank of Canada, the Hong Kong Monetary Authority and the Monetary Authority of Singapore.
The BOT is also organizing a DLT proof of concept for scripless government savings bond sale to enhance operational efficiency, in addition to Project Inthanon.
The phase one of Project Inthanon will engage the BOT and the participating banks to design, develop and test a proof-of-concept prototype for domestic wholesale funds transfer by using wholesale CBDC.
During the first phase of the project, significant payment functionalities such as liquidity saving mechanism and risk management will also be developed and tested.
The phase one of the project is expected to be completed in the first quarter of 2019.