China’s digital yuan has put a huge stress on the fiscal policies around the world, but it was felt primarily in the Asian-Pacific region. Thailand and its national bank announced that they too are developing and deploying a central bank-issued digital currency (CBDC), which will be based on a previous project called Project Inthanon.
Project Inthanon is a collaborative project between eight different leading financial institutions and the central bank of Thailand. It`s aim was to explore and create a proof-of-concept for domestic wholesale funds transfer using CBDC. For achieving project goals, a support was received by the Hong Kong Monetary Authority (HKMA).
The Bank of Thailand and the HKMA are now expected to continue their mutual collaborative work towards experimenting with CBDC on different new ways for cross-border transfers.
“This project marks an incredible milestone for broadening the scope of CBDCs in general, as well as adopting the CBDC by a larger audience”, Bank of Thailand’s press release states.
One of the first companies to enter the CBDC testing phase is Siam Cement PLC, as well as its entire network of suppliers. The prototype system is developed by Digital Ventures Co Ltd. The aim is to reduce transaction speeds, improve efficiency, and to enhance the experience of purchasing and payments management.
Siam Cement’s Vice President and CFO Thammasak Sethaudom commented on the June 18 Memorandum of Understanding signing between him and Bank of Thailand officials, stating that “the company is excited to work side by side with the Bank of Thailand and Digital ventures into developing the vital for Thailand’s economy CDBC payment system”.
“We partnered with Digital Ventures prior to the signing, as they helped us deploy a working Procure-to-pay blockchain solution, which greatly improved invoicing, and payment processing”, Sethaudom added.
The CBDC development will begin in July, with a time frame for a working CBDC solution until the end of 2020. The key aim in the collaborative effort is to make the CBDC in development a true financial innovation and to serve as a flexible and transparent way of payments between suppliers.