Bank of Thailand Completes First Phase Of Wholesale Cryptocurrency Projectbr>
The Bank of Thailand (BOT), the country’s central bank, has published a report on the outcome and findings of the first phase of its wholesale Central Bank Digital Currency (CBDC) project.
The wholesale CBDC initiative, called Project Inthanon, explores the potential in using distributed ledger technology (DLT) to enhance Thailand’s financial infrastructure and to encourage collaborative learning among involved parties.
The phase I of the project, which ran from August 2018 to January 2019, was conducted in partnership with blockchain firm R3 and eight local banks, including Bangkok Bank, Krungthai Bank, Bank of Ayudhya, Kasikornbank, Siam Commercial Bank, Thanachart Bank, Standard Chartered Bank Thai and HSBC.
The BOT said that the trial proved that blockchain can fulfil basic payment functionalities and demonstrated capabilities to help enhance payment efficiency and to support interbank transfer and settlement during off-hours. However, the central bank noted that despite its high capabilities, DLT would need more time to mature to the stage in which the technology can be fully adopted for the payment system infrastructure.
“More experiments would be needed to further affirm DLT’s capabilities, and any challenges to comply with international payments standard such as scalability, security and system resiliency should be explored,” the BOT said.
The BOT further said that it will continue to work with R3 and the eight participating banks explore further applications of DLT in two areas. The first area is Interbank Trading and Repurcharse transaction, with the aim of reducing delivery and settlement time for financial transactions related to BOT issued debt instruments on DLT system. The second one is Regulatory Compliance and Data Reconciliation, which will explore how DLT can facilitate banks’ reconciliation of customer accounts and money transfers in compliance with the BOT regulations in order to reduce error and associated compliance costs.
The second phase of the project will start next month and is expected to be completed by the third quarter of 2019.