Thailand’s Central Bank Announces Digital Currency Prototypeby Fintech News Singapore June 19, 2020
The Bank of Thailand (BOT) has announced the project to develop the prototype of the payment system for businesses using Central Bank Digital Currency (CBDC), which will build upon knowledge from Project Inthanon. The project scope will include conducting a feasibility study and developing a process to integrate CBDC with the business’ innovative platform.
The BOT recognizes and supports the important roles of financial innovation and technology in enhancing the competitiveness and readiness of the business sector entering the digital age. In recent years Thailand’s central bank has been displaying leadership in driving the adoption of distributed ledger technologies and CBDCs.
The project marks an important step in broadening CBDC’s scope and adoption to wider audiences, starting with large corporates. In this project, the CBDC prototype will be integrated with the procurement and financial management systems of the Siam Cement Public Company Limited and its suppliers developed by Digital Ventures Company Limited.
The prototype is expected to serve as a financial innovation that enables higher payment efficiency for businesses such as increasing flexibility for fund transfers, or delivering faster and more agile payments between suppliers. The project will begin in July 2020 and is expected to conclude by the end of the year, after which the BOT will publish the project summary and outcome accordingly.
In addition, Project Inthanon, the collaborative project between the BOT and the eight leading financial institutions to study and develop the proof-of-concept for domestic wholesale funds transfer using wholesale CBDC, has been accomplished in January 2020 with the successful completion of the cross-border transfer prototype co-developed with the Hong Kong Monetary Authority (HKMA). In the next step, the BOT, the HKMA and the participating financial institutions will continue to collaborate and experiment CBDC for other use cases in cross-border transfers, which the BOT will later announce in detail.
The BOT said that it strongly believes that continuous collaborations and development in financial innovation with the business sector would lay foundation in building technological capacity and readiness for the financial services and businesses rapidly entering the digital age. Moreover, the BOT remains open to private sector engagements to further promote innovation and explore potential uses cases for future adoptions.