The Thailand Central Bank has recently released a new announcement stating that it will launch its own cryptocurrency. The Thailand-backed Central Bank Digital Currency, which has been dubbed the CBDC by some, will be reportedly using R3’s Corda platform.
Thailand Central Bank to Launch Wholesale CBDC
In a recent press release that was published on August 21, the Thailand Central Bank announced the launch of a new cryptocurrency that would be of their own making. The so-called CBDC (Central Bank Digital Currency) is a type of crypto that is issued by the central bank itself, but its legal tender status still depends on the laws and regulations of its respective government.
The Bank of Thailand is launching a special variant of CBDC called ‘wholesale CBDC’, which means that the crypto will have a relatively limited set of use cases. It is reported that this currency will only be used by financial markets and institutions, while a ‘retail’ version of the coin is usually meant to be used by the general public.
The DLT (decentralized ledger technology) platform behind the currency, R3 Corda, was reportedly created with the intention of working with various entities from the financial services sector. Corda can use its permission system in order to limit access to data, and allow only those with proper authorization to access such information
The announcement notes that the Thailand Central Bank will also partner with upwards of eight other financial institutions for this project. These institutions include Bangkok Bank Public, HSBC, Krung Thai, Standard Chartered, as well as Siam Commercial Bank. Issuing a statement on the project, the central bank described this ambitious project as a ‘collaborative milestone’, which will see all of the aforementioned banks join hands and create a PoC wholesale CBDC prototype.
Bank Plans for Future
While this will likely be a long and complex project, the banks are confident that the first phase will be finished by Q1 of 2019. The project, which has been dubbed ‘Inthanon’, has goals to improve the efficiency and infrastructure of Thailand’s financial market. Additionally, the banks expect their efforts to be the first step towards the market’s evolution to become technologically-advanced.
Another thing worth mentioning is that this announcement has also revealed that the Thailand Central Bank also plans to conduct a DLT PoC for the bond sale of scripless government savings. The goal here would be the eventual improvement of operational efficiency.
Obviously, the CBDCs have become an interesting concept in the banking sectors, and this doesn’t only include Thailand, but the rest of the world as well. Anthony Lewis, the director of R3, spoke at this year’s Deconomy conference in South Korea. According to Lewis, 2018 will see a lot of acceleration regarding the development of wholesale CBDC projects, and he expects this due to the fact that institutions are able to recognize the huge amount of potential that this technology can offer.
When it comes to the retail version of CBDCs, however, the response is more circumspective. Back in March of this year, the BIS (Bank for International Settlements) said that retail CBDCs might lead to more instability of deposit funding within commercial banks. They also stated that this version of CBDCs could fuel faster bank runs, which is something that the Bank of England also pointed out in May of this year.