On June 18, 2020, The Bank of Thailand (BOT) announced that it would develop a prototype payment system for corporate entities using a Central Bank Digital Currency (CBDC), to enhance the proficiency of procuring and payment management in the business industry.
The Thai CBDC is designed to cut transaction stages and processing time, which will greatly boost corporate confidence and champion Fintech innovation in the future.
Indeed, the BOT identifies and firmly backs the role of financial novelty and tech in improving the readiness of the business sector for the digital age.
The CBDC project marks an important step in broadening the scope and adoption of digital currencies by a wider audience, starting with large corporations.
As per the Thai government press release, the project will begin in July of this year and conclude by year-end, after which the Bank of Thailand will publish a project summary.
The Project will build on BOT’s Previous CBDC Work
The latest project will build upon knowledge from Project Inthanon, a collaborative project of the BOT with leading financial institutions in the country.
The BOT had earlier unveiled plans to develop a wholesale CBDC that would use R3’s Corda platform, in a press release published on August 21, 2018.
As per the announcement, the BOT partnered with eight financial institutions on the CBDC project – including Bangkok Bank Public, Krung Thai, Siam Commercial Bank, Standard Chartered Bank, and HSBC.
Project Inthanon reportedly aimed to enhance the efficiency of the Thai financial market infrastructure and contribute to the design of its future evolution.
The venture concluded with the successful completion of a cross-border remittance model developed in partnership with the Hong Kong Monetary Authority.
Inthanon successful completion enabled the direct bank to bank payments without the need to use correspondent banks.
Thai Government Keen on Embracing Blockchain Tech
Thailand actively pursues continuous partnerships with Fintech companies so as to foster financial innovation in the corporate industry.
The BOI believes that this will lay the foundation to build technological capacity in readiness for the fast-approaching digital era.
While most current CBDC platforms have fixated on either wholesale CBDC for financial establishments or retail CBDC for day-to-day use, the BOT has taken a novel approach to digital currencies that provides a CBDC for enterprise blockchain use without limiting the participants to banks.
The news comes just two days after Thailand’s Public Debt Management Office (PDMO) announced plans to conduct a pilot savings bond issue of 200M baht as a trial of blockchain-based savings bonds.