BOT announces Central Bank Digital Currency prototype development project

By Edil Corneille

​The Bank of Thailand (BOT) will develop the prototype of the payment system for businesses using Central Bank Digital Currency (CBDC). This will build upon the knowledge from Project Inthanon. The scope of the CBDC project includes the conducting of a feasibility study and the development of a process to integrate CBDC with the platform of businesses.

In a press release, BOT mentioned, “The BOT recognizes and supports the important roles of financial innovation and technology in enhancing the competitiveness and readiness of the business sector entering the digital age. The project marks an important step in broadening CBDC’s scope and adoption to wider audiences, starting with large corporates.

“In this project, the CBDC prototype will be integrated with the procurement and financial management systems of the Siam Cement Public Company Limited and its suppliers developed by Digital Ventures Company Limited. The prototype is expected to serve as a financial innovation that enables higher payment efficiency for businesses such as increasing flexibility for fund transfers, or delivering faster and more agile payments between suppliers. The project will begin in July 2020 and is expected to conclude by the end of the year, after which the BOT will publish the project summary and outcome accordingly.”

In addition, Project Inthanon, the collaborative project between the BOT and the eight leading financial institutions, to study and develop the proof-of-concept for domestic wholesale funds transfer using wholesale CBDC, has been accomplished in January 2020. Moreover, the cross-border transfer prototype co-developed with the Hong Kong Monetary Authority (HKMA) has been completed too. In the next step, the BOT, the HKMA and the participating financial institutions will continue to collaborate and experiment CBDC for other use cases in cross-border transfers.

The BOT has stated that it strongly believes in the continuous collaborations and developments in financial innovation with the business sector laying the foundation in building technological capacity and readiness for the financial services. Moreover, the BOT remains open to private sector engagements to further promote innovation and explore potential uses cases for future adoptions.