Central Bank of Thailand or BoT moves ahead with its digital currency project, as it built a prototype solution based on blockchain.
The digital currency project of the BoT
The new solution is going to enable the Bank of Thailand to settle interbank transactions with the use of digital currency among its eight commercial bank partners. The tech partner of the Central Bank of Thailand, the so-called Wipro, has announced the news this Tuesday.
Wipro Limited is actually a multinational corporation from India which provides information technology, business process, and consulting services. In fact, it is based in India, and as of 2019, the firm turns more than $8.47 billion yearly.
Both of them built the prototype as a part of the digital currency project of the central bank, the so-called Inthanon. Wirpo, together with R3, which is an enterprise software company on the Corda platform, provided development services.
This solution is going to permit the decentralized interbank real-time gross settlement utilizing a wholesale CBDC or Central Bank Digital Currency for faster payment, according to Wipro.
DLT could enhance payment efficiency
Wipro added that the prototype successfully demonstrated that the distributed ledger technology or DLT may significantly improve payment efficiency as it will enable 24/7 interbank settlements.
The Bank of Thailand or BoT revealed the project for the first time in June of last year, seeking to create its own crypto based on blockchain, to make interbank transactions cheaper, as well as faster.
In August 2018, the BoT said that the ultimate aim of this effort was to improve the efficiency of the financial market infrastructure in Thailand. The banking partners of the project also include Krung Thai, Bangkok Bank Public, Standard Chartered Bank, Siam Commercial Bank, and HSBC, among the others.
The Central Bank of Thailand even revealed that it works on another DLT proof-of-concept or PoC which is designed to boost the government bond sales’ efficiency.
Blockchain adoption outside of Thailand
Outside of Thailand, it looks like blockchain was making strides; however, in the Netherlands, the Dutch Central Bank worked with blockchain to create found DLT prototypes. They have also evaluated each of the developments and were unimpressed by the final result.
The DLT actually came with limits like low capacity, high energy use which leads to a lack of efficiency, and uncertainty about which payments have gone through.
The director of payments, as well as market infrastructures at the De Nederlandsche Bank, named Ptera Hielkema, said that they started with small steps, understanding the Bitcoin mining and software in a centralized vs. decentralized way.
Then, they built some prototypes and tested if DLT networks could actually benefit parts of their market infrastructure while still providing the functionality which was needed in payments.