Bank Of Thailand To Issue Central Bank Digital Currencybr>
The Bank of Thailand (BOT), the country’s central bank, is currently developing and testing blockchain applications in the bank’s regulatory sandbox.
In a speech at an industry event in Singapore, BOT governor Veerathai Santiprabhob said that the central bank is exploring blockchain use cases in various financial applications, including supply chain, bond issuance and letters of guarantee.
“This initiative is a collaboration between 14 Thai banks and seven 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,” Santiprabhob said. “This project is expected to become operational in the second half of this year. 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.”
The central bank chief said that they are also planning to develop a new way of conducting inter-bank settlements using a wholesale central bank digital currency (CBDC). Dubbed Project Inthanon, the goal of the project is to enable faster and cheaper settlements between banks on the domestic inter-banking system using the CBDC.
“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,” Santiprabhob said. “These efforts should pave way for faster and cheaper transaction and validation due to less intermediation needed compared to the current systems.”
Santiprabhob also touched on the new Payment Systems Act, which came into force in April of this year. Under the new law, domestic crypto exchanges, initial coin offering (ICO) operators, and independent crypto brokers and dealers are required to register with the Thai Security Exchange Commission (SEC).
“The Act unifies previously fragmented payment laws and regulations under a single Act, and empowers the Bank of Thailand with the authority to both regulate and oversee development of Thai payment systems in a manner conducive to new payment innovations.”