On August 21, the Bank of Thailand (BOT) and local financial institutions agreed to launch a project to raise the Thai financial sector’s technological readiness in adopting new financial technologies to enhance operational efficiencies.
“In this regard, creating an ecosystem conducive for collaborative learning in technology will be an important driving force towards a digital future for the Thai financial sector”, – writes BOT in a press release.
Project Inthanon is a collaborative milestone led by the BOT; R3, a technology company that develops DLT platform named Corda, and 8 participating banks including Bangkok Bank Public Company Limited, Krung Thai Bank Public Company Limited, Bank of Ayudhya Public Company Limited, Kasikornbank Public Company Limited, Siam Commercial Bank Public Company Limited, Thanachart Bank Public Company Limited, Standard Chartered Bank (Thai) Public Company Limited, and The Hongkong and Shanghai Banking Corporation Limited, to explore the implications and the potential benefits of Distributed Ledger Technology (DLT) to enhance efficiency of the Thai financial market infrastructure. The BOT and the participating banks will collaboratively design and develop a proof-of-concept prototype for wholesale funds transfer by issuing wholesale Central Bank Digital Currency (Wholesale CBDC). The prototype will be built on Corda, a DLT platform developed by R3.
In addition to Project Inthanon, the BOT is conducting a DLT proof of concept for scripless government savings bond sale to improve operational efficiency.
Project Inthanon Phase 1 will involve the BOT and the participating banks in collaboratively designing, developing and testing a proof-of-concept prototype for domestic wholesale funds transfer by using wholesale CBDC. Key payment functionalities such as liquidity saving mechanism and risk management will also be developed and tested during this phase. Project Inthanon Phase 1 is expected to be completed by the first quarter of 2019.
Building upon the findings and outcomes from Phase 1, the project participants aim to further develop the capabilities of the prototype for broader functions including third party funds transfer and cross-border funds transfer.