Bank Of Thailand Planning To Adopt Blockchainbr>
Veerathai Santiprabhob, governor of the Bank of Thailand, said that the central bank is planning to adopt blockchain technology for its bond issuance and wholesale central bank digital currency.
Speaking at the Bangkok FinTech Fair 2018, Santiprabhob said he believes blockchain would improve productivity and lower operating costs with higher security. He said the central bank’s bond issuance via blockchain would shorten the time for bond underwriting from around 15 days to a few days.
According to the governor, the Bank of Thailand has a proof of concept to develop a wholesale bank digital currency using blockchain to be called Inthanon. This program will improve the bank’s management of interbank Baht settlements, as well as keeping its practices current with its counterparts in the rest of the world.
“If the central banks can build up an ecosystem to link them across the world, it would open up a cross-border platform,” said Santiprabhob. “The project would increase efficiency and slash interbank settlement. More than five financial institutions, both local large and foreign banks, have shown interest in participating. With the massive transaction volume of such banks, the project would improve efficiency and Thailand’s ecosystem.”
Santiprabhob also announced that 14 Thai banks have joined forces to create the Thailand Blockchain Community Initiative, which will digitize letters of guarantee on a shared blockchain platform.
The country’s top banks – Bangkok Bank, Krung Thai Bank, Siam Commercial Bank and Kasikornbank – will all participate in the initiative. Related technologies and legal aspects of the initiative are being supported by Accenture, Baker & McKenzie, and NECTEC and IBM.
The initiative also has the backing of three state enterprises and four large corporations. This include the Metropolitan Electricity Authority, the Provincial Electricity Authority, the Electricity Generating Authority of Thailand, PTT Global Chemical Plc, PTT Polymer Marketing, IRPC Plc and Siam Cement Group.
Santiprabhob said the Thailand Blockchain Community Initiative will reduce the complexity of connecting to the same financial services provided by different banks, facilitate data verification on the same blockchain network, mitigate risks of counterfeiting and increase timeliness as well as security.
“With this infrastructure sharing, banks do not need to invest on their own,” Santiprabhob. “Interoperability enhances efficiency, reduces costs in our financial sector and addresses the needs of the consumer and the business sector.”
The letters of guarantee blockchain service will initially be tested in the Thai central bank’s “sandbox.” It is expected to have an interoperability launch in the third quarter of this year.