The bank of Thailand has announced its plans to use blockchain technology to improve services while lowering operating costs and tightening security but will keep cryptocurrency regulations in place.
BoT Integrating into International Ecosystem
Veerathai Santiprabhob Thailand’s Central Bank Governor spoke at Thai FinTech Fair 2018 on Monday outlining the plan to implement blockchain technology for its bond issuance and central bank digital currency, and interbank payment system. Using blockchain technology could shorten the central bank’s bond underwriting time from 15 days to just a few, he said.
In his address, Santiprabhob said that the central bank has a proof of concept to develop a wholesale bank digital currency using blockchain to be called Inthanon. This program will improve the bank’s management of interbank Baht settlements as well as keeping its practices current with its counterparts in the rest of the world.
The central banks of Canada, England, and Singapore already have digital currency services in place while Saudi Arabia and South Africa are testing like systems. The digital currency system could improve efficiency and reduce interbank settlements costs if it can be made part of the international ecosystem already existent. Mr. Veerathai said about the cross-border platform.
“More than five financial institutions, both local large and foreign banks, have shown interest in participating. With the massive transaction volume of such banks, the project would improve efficiency and the country’s ecosystem,”
In related news, 14 Thai commercial banks have partnered with seven private companies and government agencies to create the Thailand community Blockchain Initiative project. The project is starting with blockchain supported letters of guarantee (LG) that are now being tested by the regulatory overseers at the Central bank.
The seven partners are Metropolitan Electricity Authority, Provincial Electricity Authority, and Electricity Generating Authority of Thailand, PTT Global Chemical Plc, PTT Polymer Marketing, IRPC Plc and Siam Cement Group. With related technology and legal aspects being supported by Accenture, Baker & McKenzie, NECTEC, and IBM.
Mr. Veerathai said the central bank is also preparing itself for future digitization which includes regulation amendments in accordance with technology development.
No Respite From Regulations
The Bank of Thailand is not changing its stance on Cryptocurrency or ICO’s, continuing to prohibit financial institutions from taking part in key cryptocurrency related activities. Some local banks have decided not to support cryptocurrency transactions in any way going so far as to close the accounts of both exchanges and traders.
Thai Rath Newspaper reported last week that the Thai Ministry of Finance was drafting two new regulatory laws involving additional taxes that could further shake up the once cryptocurrency trading-friendly kingdom.