Bank of Thailand plans state-backed digital currency

The Bank of Thailand (BoT) will partner with international and local banks in developing a state-issued cryptocurrency on the R3 consortium’s Corda blockchain. The initiative is a first for the Southeast Asia region.

Bank of Thailand will work with eight others on a state-backed cryptocurrency: ShutterstocK

Thailand’s central bank referred to the protocol as a “wholesale” Central Bank Digital Currency (CBDC), which limits its use to financial institutions and related markets. Earlier reports had speculated on plans for a state-controlled cryptocurrency for the citizens, which would be referred to as a “retail” CBDC.

Project Inthanon, which takes its name from Thailand’s highest peak, is described as a “collaborative milestone” and will see BoT partner with eight major international and local banks. They include Bangkong Public Bank, Krung Thai, Siam Commercial Bank, HSBC and Standard Chartered, while R3 will act as technological partner

Each banking partner will design a proof-of-work protocol that will run the architecturally decentralised blockchain system. “Project Inthanon Phase 1 is expected to be completed by the first quarter of 2019 after which the BoT will publish a project summary accordingly,” BoT announced.

Welcome boost

Inthanon aims to improve the efficiency of Thailand’s financial ecosystem at a time when the economy is weakening, and also to assist a responsible evolution of the Thai equity market. In addition to Inthanon, BoT is developing a distributed ledger technology (DLT) system to issue “scripless” government savings bonds to “improve operational efficiency.”

R3’s Corda enterprise blockchain is a DLT platform designed to work within the financial service sector, using a permissioned system to restrict data access to required participants only. The partnership with BoT provides a welcome boost after several founding partners left the consortium earlier this year.