The Bank of Thailand (BoT) has announced the coming of its Central Bank digital currency (CBDC) that will be built on r3 technology. There is a projection to complete the first phase of a proof-of-concept trial in March 2019.
According to a BoT press release, the potential of technologies such as blockchain to improve financial institutions has led to the launch of “Project Inthanon.” The central bank will execute the new project in collaboration with eight local financial institutions, and enterprise-focused consortium r3 blockchain.
The ultimate goal is to “enhance the efficiency of the Thai financial market infrastructure,” by introducing a CBDC that will utilize a digital ledger technology, Corda, owned by r3 technology.
The new digital currency will make financial transactions a lot easier for the participating institutions which include the Bangkok Bank Public Company Limited, Krung Thai Bank Public Company Limited, Bank of Ayudhya Public Company Limited among others.
Details of the project
The first phase of “Project Inthanon” will focus on analyzing the pros and cons of utilizing distributed Ledger Technology (DLT) in the financial sector, as well as developing a proof-of-concept prototype used in the wholesale transfer of funds using the CBDC.
The first phase of the project will see the participating banks design the prototype of the project which will include a local wholesale transfer of CBDC, risk management, and liquidity-saving mechanism. The bank mentions that it will publish a summary at the end of the trial which is expected to be at the end of the first quarter of 2019. This will lead to the next phase where findings from the experiment will be used to test the prototype on a large scale like cross-border transactions.
Are Central Banks turning to CBDCs?
This is not the first time central banks of various countries will be conducting a project similar to this one. With this move from the BoT, the bank has joined a host of other banks that have gone through this process including- the Bank of Canada, the Hong Kong Monetary Authority, and the Monetary Authority of Singapore.