The Bank of Thailand (BoT) has unveiled plans to work on a wholesale Central Bank Digital Currency (CBDC) that would make use of R3’s Corda platform.
The plans were revealed in a press release that was recently published.
A CBDC is a digital currency issued by a central bank whose legal tender status relies on government regulation or law. The “wholesale” variant of CBDC restricts its use to financial institutions and markets, compared to a “retail CBDC” for the general public.
R3’s Corda is a distributed ledger technology (DLT) platform that has been specifically made to work within the financial service sector and utilizes a permissioned system to limit data access to essential personnel only.
According to the press release, the BoT is collaborating with eight financial institutions on the CBDC project. This includes Bangkok Bank Public, Krung Thai, Siam Commercial Bank, Standard Chartered Bank and HSBC.
In what BoT describes as a “collaborative milestone,” the banks involved would jointly design and work on the proof-of-concept wholesale CBDC prototype, the first phase of which is set to be finished by the first quarter of 2019. The effort, called Project Inthanon, reportedly seeks to “enhance efficiency of the Thai financial market infrastructure” and help in the design of its future evolution.
The announcement reveals that aside from Project Inthanon, the BoT is “conducting a DLT (distributed ledger technology) proof of concept for scripless government savings bond sale to improve operational efficiency.”
CBDCs continue to entice interest and elicit contrasting opinions within the banking sector all over the world. At the Deconomy conference in South Korea this April, R3’s research director Anthony Lewis projected that efforts to work on wholesale CBDCs would quicken in 2018, due to a rising number of institutions acknowledging the possible benefits that could be reaped through their issuance.
Retail CBDCs, meanwhile, have drawn a more guarded response. This March, the Bank for International Settlements (BIS) claimed that “a general purpose [retail] CBDC could give rise to higher instability of commercial bank deposit funding” and possible fuel faster bank runs, an opinion that was reiterated by the Bank of England a few months back.
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