Bank of Thailand Announces Wholesale Central Bank Digital Currency

In an open statement published yesterday, the Bank of Thailand (BOT), the country’s central bank, announced that it has begun developing a wholesale central bank digital currency. The project is designed to address technological changes happening in the financial services industry by raising the Thai financial sector’s readiness for adopting new financial tech.

The initiative is called Project Inthanon and is being led by the BOT along with technology partner R3 and eight other banks, including Bangkok Bank, Krung Thai Bank, and Bank of Ayudhya.

“The BOT and the participating banks will collaboratively design and develop a proof-of-concept prototype for wholesale funds transfer by issuing wholesale Central Bank Digital Currency (Wholesale CBDC),”  reads the BOT’s public statement. “The prototype will be built on Corda, a DLT platform developed by R3.”

In addition, the BOT and its partners will be “exploring the implications and benefits of Distributed Ledger Technology to enhance efficiency of the Thai financial market infrastructure.” Through Distributed Ledger Technology, the BOT is hoping to create a proof of concept for a scriptless government savings bond sale to improve operational efficiency.

Project Inthanon is currently in Phase 1, which involves the BOT and its partners collaboratively “designing, developing and testing a proof-of-concept for domestic wholesale funds transfer by using wholesale CBDC. ”

The BOT also plans on developing and testing a liquidity saving mechanism and risk management protocol during this phase. The BOT will be providing an updated project summary after Phase 1 is completed during the first quarter of 2019.

BOT Moves Forward While Other National Monetary Authorities Express Disinterest in CBDCs

The BOT states that Project Inthanon was inspired by similar projects being launched by other national monetary authorities like the Bank of Canada, the Hong Kong Monetary Authority and the Monetary Authority of Singapore.

However, it is worth noting that the Bank of Canada hasn’t taken any steps forward in developing a digital currency since first mentioning considerations for the project in 2017.

The Hong Kong Monetary Authority has since abandoned the idea of developing a CBDC, stating, “In the context of Hong Kong, the already efficient payment infrastructure and services make CBDC a less attractive proposition. The HKMA has no plan to issue CBDC at this stage but will continue to monitor the international development.”

It is also likely the Monetary Authority of Singapore has also cooled off to the idea of a CBDC following the litany of crypto-related crime hitting Asia this year. In a public statement in May, the Monetary Authority of Singapore warned against trading digital tokens and insisted that ICO issuers to stop offering tokens in Singapore.