Thailand moves forward in wholesale digital currency development plan

The first phase will be completed by Q1 2019.

The first phase of the central bank’s wholesale digital currency (CBDC) project is expected to be fully developed by the first quarter of 2019, reports Bangkok Post.

The Bank of Thailand along with eight commercial banks - Bangkok Bank, Krungthai Bank, Bank of Ayudhya, Kasikornbank, Siam Commercial Bank, Thanachart Bank, Standard Chartered Bank Thai and HSBC - will design, develop and test a proof-of-concept prototype for domestic wholesale fund transfers using the wholesale CBDC as part of Project Inthanon.

The prototype will be built on R3’s distributed ledger technology platform, Corda.

Project Inthanon will also study the potential implications of the technology to improve back-office operations.

“These efforts should pave way for faster and cheaper transaction and validation due to less intermediation process needed compared to the current systems,” Bank of Thailand deputy governor Veerathai Santiprabhob said in a previous statement.

Also read: How can blockchain unblock Thai banks' trade finance slump?

This comes on the heels of an earlier collaboration of 14 Thai banks to develop a shared trade finance blockchain platform, with the country’s big four, Bangkok Bank, Krung Thai Bank, Siam Commercial Bank, and Kasikornbank, planning to launch electronic letters of guarantee that will be tested in a regulatory sandbox.

Analysts believe that the industry’s digital shift is a welcome development to boost profitability as the transition will raise cost efficiencies, streamline overall operations and expand available offerings.