Bank of Thailand Announces Digital Currency Proof-of-Concept

cryptocurrency bitcoin blockchain proof-of-concept

The central bank of Thailand has announced it is working on a proof-of-concept for a central bank digital currency, with the first phase of the trial earmarked to run until March 2019.

According to a news release issued by the Bank of Thailand this week, the bank has collaborated with eight different institutions to create the currency, which will be based on R3’s Corda platform.

The proof-of-concept ultimately aims to develop a cryptocurrency that can be used in interbank settlement, which will lead to efficiency gains throughout Thai financial markets.

Interbank settlement is one of the most developed use cases for cryptocurrency, allowing banks and financial institutions to process transactions quickly, securely and directly.

Leading to significant reductions in the time and processing costs of these large bank-to-bank transactions, the Bank of Thailand has said it expects the cryptocurrency would “enhance (the) efficiency of the Thai financial market infrastructure.”

Dubbed Project Inthanon, the development has seen the Bank of Thailand join the R3 consortium, the network of companies and developers responsible for developing the core R3 Corda blockchain platform, a move that has been echoed by its partner companies.

Among those partnering up with the bank on the project are HSBC, Siam Commercial Bank, Krung Thai, Bangkok Bank Public and Standard Chartered Bank (Thailand).

In the release, the bank intimated that this was just the beginning, with plans to develop prototype capabilities to include other types of transactions, like international money transfers.

“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.

“Building upon the findings and outcomes from Phase 1, the project participants aim to further develop the capabilities of the prototype for broader functions including third-party funds transfer and cross-border funds transfer.”

The project was first mentioned by the governor of the central bank in June, where it was noted that the bank was keen to explore the concepts around cryptocurrencies and blockchain with a view to a formal rollout in future.

The move sees the Thai central bank join the growing list of central banks around the world investigating cryptocurrency and blockchain solutions for their domestic financial system, including the Hong Kong Monetary Authority, the Bank of England and the Bank of Canada.