Thai central bank has become the latest financial watchdog to join the Central Bank Digital Currency (CBDC) bandwagon. The Bank of Thailand (BoT) announced its project to build a decentralized payments system prototype for commercial use.
According to the announcement, the CBDC prototype will be hosted by the Inthanon Project, the blockchain infrastructure inaugurated by the Bank of Thailand. This will be achieved through a partnership with the country ‘s eight leading financial institutions.
The entire project involves carrying out a feasibility study and creating a procedure for linking Central Bank Digital Currency to the Business Payments System, as per the Thai Central Bank. The prototype project is set to start in July and will continue until the end of the year. The findings of the scheme will then be outlined by the Thai central bank to the public.
Thai Central Bank making a step forward in driving CBDC adoption
The Bank of Thailand sees the project as a significant step forward in expanding the CBDC ‘s realm and driving its adoption to a broader audience, starting with big corporations. The payment system will be linked to the procurement and financial management systems of Siam Cement Public Company and its stockists,
The Thai central bank anticipates that the CBDC prototype will facilitate coherent and more flexible transactions or a faster and more flexible settlement between suppliers. In addition , the Bank of Thai also noted that proof of concept for local wholesale revenue; was finalized in January alongside the cross-border transfer prototype; developed in partnership with the Hong Kong Monetary Authority (HKMA).
Development of CBDC’s worldwide
Different central financial authorities are keenly exploring the development of CBDC’s around the world. For instance, the Bank of Korea (BoK) recently established a legal advisory panel for the development of digital currencies.
Furthermore, the Bank of France has partnered with local private banks to run a pilot test for state-issued cryptocurrencies in Europe.