Central banks’ antagonism towards crypto-currencies is well established. Banks profit from charging customers for transactions and services, but decentralized currencies cut out the need for the middle man – the banks. This allows crypto users to do business more efficiently and at significantly reduced cost.
However, increasingly, even central banks are coming around to understanding the advantages that a blockchain based currency can bring. The latest to make an announcement to that effect is the Bank of Thailand (BoT), which says it will launch its own version by the first quarter of 2019.
This week the Bangkok Post reported that the new virtual currency will be called, rather unimaginatively, the Central Bank Digital Currency (CBDC). The BoT says that it, alongside eight commercial banks, will develop and test a proof-of-concept prototype for domestic fund transfers using the new crypto-currency.
According to the Bangkok Post, the eight participating banks are Bangkok Bank, Krungthai Bank, Bank of Ayudhya, Kasikornbank, Siam Commercial Bank, Thanachart Bank, Standard Chartered Bank Thai and HSBC.
For their operating platform the banks have selected database firm R3, a centralized blockchain option as opposed to a decentralized platform such as Ethereum. New York City-based R3 has developed its own enterprise level distributed ledger platform, Corda, which will be used for the Thai bank’s digital currency.
“Technological changes are having a major impact on financial services,” the central bank said. “The Bank of Thailand and local financial institutions agreed to launch a project to raise technological readiness in adopting new financial technologies to enhance operational efficiencies. Creating an ecosystem conducive for collaborative learning in technology will be an important driving force towards a digital future.”
Thailand is not the only Asian country looking to adopt its own crypto-currency. The Monetary Authority of Singapore and the Hong Kong Monetary Authority are reportedly developing similar projects.
Following an uncertain start to 2018 with a number of proposed tax clampdowns, Thailand’s military regime has increasingly warmed to the crypto industry and now appears to be taking the Singaporean and South Korean model of crypto adoption rather than the draconian Chinese one.
The Thai government has worked on a regulatory framework which favors crypto exchanges and last week the SEC announced that seven exchanges have been approved for legal operations. Earlier this month the SEC revealed that over 50 ICO projects were becoming interested in operating in the Kingdom as more clarity in the associated regulations came to light.