Bank of Thailand Uses R3 Technology for Cryptocurrency PilotAndri Triyanto
The Bank of Thailand has announced that it has made considerable progress on its new cryptocurrency pilot program. Powered by the R3 technology, the country’s central bank is looking forward to creating a digital currency of its own. The first phase of this project is set to complete in the first quarter of 2019. In a press release published on Tuesday, the bank said that it has partnered with eight financial institutions in the country for this project. Together, these entities will work on project Inthanon- the digital currency of the central bank.
Over the past few months, the debate around the creation and adoption of Central Bank Digital Currency (CBDC) has increased. Several banks across the globe are interesting in exploring the uses of blockchain but are inching away from the cryptocurrency sphere. The Bank of Thailand has taken a refreshing new approach in this regard as it is already on its way to experimenting with a crypto coin.
The BoT is currently eyeing on running its Inthanon on R3’s proprietary blockchain technology platform called Corda. In the press release, the central bank stated, “The outcome and insights from Project Inthanon will contribute to the design of Thailand’s future financial market infrastructure. This is in line with similar projects embarked upon by other central banks such as the Bank of Canada, the Hong Kong Monetary Authority and the Monetary Authority of Singapore. In addition to Project Inthanon, the BOT is conducting a DLT proof of concept for scripless government savings bond sale to improve operational efficiency.”
With the support of its eight partners, the bank will complete the design, development and testing of the project, more specifically, a proof-of-concept prototype. This prototype will be used for making domestic wholesale fund transfers using the CBDC. The testing will primarily be focused on creating liquidity saving mechanism and risk management strategies in the currency. When the first phase of the project completes in March, the bank will release a detailed summary of Project Inthanon.
The steps taken by the central bank become more important in the light of recent events in the Thai cryptocurrency sector. In June this year, the government released their final framework to regulate digital currencies in the country, which included both ICOs and trading in these coins. The Thai Securities and Exchange Commission (SEC) even approved seven digital coins which will be used to create financial benchmarks for exchanges and broker services in the country. Clear rules were laid out for the ICO industry as well. Earlier this month, the SEC even approved seven crypto exchanges in the country.
It is unclear whether Project Inthanon will remain a pilot within the central bank or see the light of the day. However, the swift action that Thailand has taken to regularize and regulate their cryptocurrency market is a lesson for several larger economies, especially the US where the SEC is still thinking about the feasibility of a crypto ETF and doesn’t have any federal regulations for the market.