Thailand’s Central Bank Considering Blockchain In Cross-border Payments

On July 12, 2018, during Bloomberg’s ASEAN Business Summit, the Governor of the Bank of Thailand (BoT), Dr. Veerathai Santiprabhob, has shown positivity towards the multiple uses of blockchain technology for various banking applications, such as biometrics, in safeguarding financial information so as to reduce fraud.

The governor stated that the bank was specifically reviewing blockchain applications for cross-border payments, supply chain financing, and document authentication for which central bank’s regulatory sandbox will be responsible for stepping up in a burgeoning and thriving mode.

“The sandbox serves as a platform for financial institutions and Fin-Tech firms to test new technologies and operating standards in a safe environment before the products and services are launched to the general public. Technologies under (sic) review include… blockchain applications for cross-border payments, supply chain financing, and document authentication.”

Due to the buoyant and robust nature of blockchain technology by now, industry leaders and Government officials have started taking this technology more seriously. It is clear that this technology has the capability to bring transition, not only limited in the creation of cryptocurrency, but in up-keeping many things such as personal identification, peer review, audit trails, elections and other types of democratic decision-making procedures.

Dr. Veerathai Santiprabhob is confident that the ongoing development of updated regulations towards regional connectivity which can be achieved through the use of blockchain applications that will further enable cross-border payments, encouraging competition and innovation in the country. He further stated, “The Bank of Thailand is also undergoing regulatory reform to review outdated rules and regulations, to facilitate ease of doing business and ensure that our regulations do not impede competition and innovation and contribute to high costs of financial services.”

Dr. Santiprabhob had announced in one of his speeches in Singapore, “Another project in the pipeline is the ‘Project Inthanon’ in which the Bank of Thailand and banks will co-develop a new way of conducting interbank settlement using wholesale central bank digital currency or CBDCs. Like other central banks, our goal is not to immediately bring CBDC into use, but rather to explore its potential and implications for back-office operations”.

This striking initiative towards the launch of ‘Project Inthanon’ for central bank digital currency to conduct interbank settlements has captured people’s attention throughout the world.

The Central Bank of Thailand is continuously validating its commitment towards blockchain technology for future prospects. This progression has been clearly communicated to us with the launch of Blockchain Community Initiative in March 2018: with 14 commercial banks, and seven public and private enterprises. Also, this last June, the Central Bank’s Governor revealed its working with the country’s financial sector to deploy blockchain technology in various platforms of banking.

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