The Bank of Thailand’s (BoT) Project Inthanon is a collaboration between the central bank and commercial banks, with the objective of exploring the potential uses of distributed ledger technology (DLT) and developing an ecosystem that supports blockchain.
The BoT recently issued a report on the project’s progress, revealing that it has matured from the proof-of-concept phase to pursuing international collaborations on cross-chain, cross-border transfers.
According to a BoT statement, the second phase of Project Inthanon was carried out from February to June 2019 in cooperation with eight leading financial institutions and R3, the project’s technology partner.
During this phase, partners from the bank and R3 collaborated on designing, developing, and testing a proof-of-concept of a decentralized Real-Time Gross Settlement system using a wholesale Central Bank Digital Currency (CBDC).
According to the central bank, this phase of the project was driven by commercial use cases to solve current business pain points and improve efficiency in the settlement system.
“The scope of Phase II included 2 key areas: Delivery-versus-Payment (DvP) for interbank bond trading and repurchase transactions, and regulatory compliance and data reconciliation for third party funds transfer,” says the BoT statement.
According to its findings, the BoT concluded that blockchain can help to enhance the efficiency of bond trading and repurchasing activities through the bonds’ life cycles, which include coupon payments, interbank outright trading, and repurchase transactions.
For Phase III of Project Inthanon, the central bank will collaborate with the Hong Kong Monetary Authority to explore interoperability among ledgers to achieve cross-border transfers, in a bid to reduce associated costs and enhance efficiency. This will involve various business modalities and the implementation of relevant foreign exchange regulations.
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