The central Bank of Thailand (BOT) has announced that it will issue its own digital currency in collaboration with the nation’s largest banking institutions. Officials acknowledge that the digital financial sector is growing quickly, and they don’t want Thailand to fall behind.
Asia Is Split When It Comes to Crypto
Attitudes towards cryptocurrency in Asia have been relatively mixed. For the most part, things went from very open to very hostile. China, for example, once dominated the bitcoin and cryptocurrency scenes, with yuan to bitcoin trading accounting for nearly 90 percent of all bitcoin activity. In addition, countries like South Korea were once responsible for roughly one-quarter of the world’s crypto transactions.
But lately, things have taken a nasty turn. China has instilled harsh bans on both initial coin offerings (ICOs) and digital currency exchanges and are also attempting to silence cryptocurrency-based media and social accounts on platforms like WeChat, the country’s largest social network.
South Korea has also instilled a ban on ICOs and threatened to do the same with digital exchanges, though regulators now say they are considering a reversal of their decision.
Not Everyone’s Against It
Other regions of Asia, however, are less stringent – downright friendly – when it comes to digital currency. Singapore has become the Asian hot spot for crypto businesses thanks to what many analysts say is an environment that openly embraces it. Many exchanges and digital currency businesses, once stationed in China, have since packed up their bags and moved their operations to Singapore in the hopes of prospering without persecution.
South Korea itself has since developed a new plan that would regulate digital currencies instead of outright banning them. It appears that most countries are facing the crypto music and realizing that those who refuse to give in are certain to get left in the dust.
The Purpose of a National Cryptocurrency
The project for Thailand’s new central bank digital currency (CBDC) will be called “Project Inthanon,” after Thailand’s tallest mountain. Bank governor Veerathai Santiprabhob describes the entity as a “new way of conducting interbank settlements,” and says that the main plan is to understand the potential behind blockchain technology to see if it could ease day-to-day activities amongst Thailand’s leading institutions.
“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. These efforts should pave the way for faster and cheaper transactions and validations due to less intermediation needed compared to the current systems.”
What Will the Currency Do?
A press release for the project states that Project Inthanon seeks to “raise the Thai financial sector’s technological readiness in adopting new financial technologies to enhance operational efficiencies,” and that 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.”
It further states that the prototype will be built on Corda, a distributed ledger technology (DLT) platform developed by R3, a technology firm based in New York City.
A Growing Ledger of Participants
Thus far, eight separate institutions have agreed to take part in the project and distribute the currency once it is fully built and operational. Among these establishments are the Bangkok Bank, Siam Commercial Bank, Standard Chartered Thai Bank, and Krung Thai Bank.
Among the eight listed participants, two were at the center of controversy earlier this month. Kasinkorn Bank and Krung Thai Bank both reported massive data breaches that affected more than 120,000 customers.
Following the news, the Bank of Thailand enforced new cybersecurity measures that required all banks under its control to make customer safety a top priority and develop new systems that could block unauthorized access to customer accounts while offering financial compensation to persons directly affected by such events.