Thai banks join hands to create blockchain network via country's Blockchain Community Initiative
Thu, 30 May 2019, 03:57 am UTC
The Bank of Thailand (BOT) announced that 22 Thai and foreign-bank branches have joined forces to create a blockchain network through the Thailand Blockchain Community Initiative (BCI), media news outlet Xinhua reported.
Veerathai Santiprabhob, the Governor of the BOT, said that the initiative aims to encourage competitiveness and maintain sustainable economic growth not only in the business sector but also in the entire country.
As per the report, the move aims to attain a 50% increase in the use of blockchain-based technology within 3 years to help cut down operating expenses and enhance efficiencies.
The Nation noted this is the first time in which Thailand and international banks collaborate to integrate blockchain on the same operating system.
Thailand’s central bank first announced BCI in March last year, revealing that 14 local banks have teamed up to develop a shared trade finance platform using blockchain technology, according to a press release cited by Nikkei.
Under the collaboration, the banks, which include the big four, Bangkok Bank, Krung Thai Bank, Siam Commerical Bank, and Kasikornbank, will use a shared blockchain platform to launch electronic letters of guarantee. These are contracts issued by banks on behalf of their clients to assure any payment obligations the client has made to trade partners.
The initiative aims to lessen the complexity of normal bank process, simplify data verification on the same network, reduce the potential of fraud information, and enhance business efficiencies.
“With this infrastructure sharing, banks do not need to invest on their own,” Santiprabhob said.
Thailand’s leading Kasikornbank was the first to launch the platform with IBM in July 2017. It is built on a distributed ledger framework called Hyperledger Fabric, which was provided by the Linux Foundation.
Earlier this month, the BOT has also made progress with its digital currency project through developing a blockchain-based prototype platform, the central bank’s tech partner Wipro revealed.
The new prototype has been developed under Project Inthanon and will allow BOT to use a digital currency to settle interbank transactions among its commercial partners, which include HSBC and Standard Chartered Bank (Thailand).
It will enable decentralized interbank real-time gross settlement (RTGS) using a wholesale Central Bank Digital Currency (CBDC) for faster payments.
“The prototype has successfully demonstrated that DLT [distributed ledger technology] can significantly enhance payment efficiency by enabling 24/7 interbank settlements,” Wipro, which developed the blockchain solution prototype together with blockchain consortium R3, said.
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