Veerathai Santiprabhob, the Governor of the Bank of Thailand, has confirmed that the government-supported central bank will be further exploring the utilization of blockchain technology to provide a more efficient inter-bank payment system.
The bank will be undertaking a project to investigate the practicality of using blockchain technology to support a wholesale digital currency while also ensuring that inter-mediation activity is reduced and transactions within the system are highly secure.
In his speech at an international investment forum in Singapore, Santiprabhob noted the increasing acceptance of blockchain technology in the financial environment of Asia. He stated that Bank of Thailand and other national banks will co-develop a new way of conducting inter-bank settlement using wholesale central bank digital currency (CBDC).
Already, CBDCs are being used in a number of countries and many nations across the world are considering the feasibility of their introduction. In his speech, Santiprabhob advised that, like other central banks, the goal was not to immediately bring CBDC into use, but rather to explore its potential and implications.
He also confirmed that Thailand had commenced the Inthanon project which would be focused on increasing the efficiency of a number of key financial transactions and activities, such as the settlements, as well as Letters of Guarantee. This would include improving validation processes while reducing processing time and costs.
Thailand’s central bank has been going through a process of adaptation, including the introduction of legislative changes with a new Payment System Act, to prepare itself for ongoing developments in technology and increased digitization of financial processes. It is anticipated that through the adoption of innovative blockchain based processes there will be substantial reductions in fees and charges for business operators when compared to the traditional financial environment.
The governor also remarked, “These efforts should pave the way for faster and cheaper transactions and validation due to less inter-mediation needed compared to the current systems.”
Efficiency enhancements had already been identified as part of a trial associated with the issuing of bonds by the Central Bank. Santiprabhob noted that the project had been able to “speed up saving bond allocation to retail investors from 15 days to 2 days”.
The formal support for the Inthanon project clearly demonstrates a recognition by the Bank of Thailand of the role that blockchain technology will be playing in the official financial environment.
Image Source: Flickr – Kat
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