Bank of Thailand digital currency scheduled for 2019

The first phase of the Bank of Thailand's wholesale Central Bank Digital Currency (CBDC), which will be used for interbank fund transfers, is expected to be completely developed by the first quarter of next year, says the central bank.

The Bank of Thailand and eight commercial banks under Project Inthanon Phase 1 will design, develop and test a proof-of-concept prototype for domestic wholesale funds transfers by using wholesale CBDC, the central bank said in a release.

The eight participating banks are Bangkok Bank, Krungthai Bank, Bank of Ayudhya, Kasikornbank, Siam Commercial Bank, Thanachart Bank, Standard Chartered Bank Thai and HSBC.

The central bank, the eight banks and database firm R3 are exploring the implications and the potential benefits of distributed ledger technology (DLT) to enhance efficiency in the Thai financial market infrastructure.

"The Bank of Thailand and participating banks will collaborate to design and develop a proof-of-concept prototype for wholesale funds transfer by issuing wholesale CBDC," the central bank said. "The prototype will be built on Corda, a DLT platform developed by R3."

Project Inthanon is similar to developments carried out by other central banks, including the Bank of Canada, the Hong Kong Monetary Authority and the Monetary Authority of Singapore.

Apart from Project Inthanon, the central bank is conducting a blockchain technology proof of concept for scripless government savings bond sales to improve operational efficiency.

Bank of Thailand governor Veerathai Santiprabhob said recently that the project would increase efficiency and slash interbank settlement costs.

"Technological changes are having a major impact on financial services," the central bank said. "The Bank of Thailand and local financial institutions agreed to launch a project to raise technological readiness in adopting new financial technologies to enhance operational efficiencies. Creating an ecosystem conducive for collaborative learning in technology will be an important driving force towards a digital future."