Dr. Veerathai Santiprabhob, the Governor of the Bank of Thailand, announced the South East Asian country would use blockchain technology to improve existing banking applications.
Blockchain Technology Gaining Momentum
Santiprabhob made the announcement on June 5, 2018, at the Nomura Investment Forum in Singapore where he also expanded on the details in his Keynote Address concerning the Thai Economy and how it plans to progress.
“We are working closely with the financial industry to apply [blockchain technology] to various banking applications. [Additionally] The Thailand Blockchain Community Initiative was officially announced at the Bangkok FinTech fair in March of this year.”
The initiative is a collaboration between fourteen Thai banks and seven leading businesses and state-owned enterprises to utilize blockchain technology in financial services, starting with a pilot project to offer blockchain-based letters of guarantee. The Governor believes that the project should become operational in the second half of 2018.
Thailand is not only South East Asian country embracing blockchain for the banking sector. According to The Asean Post, the Bank of Indonesia announced in January 2018 that they plan to launch their digital currency. Additionally, Singapore and the Philippines are reportedly exploring the technology to make banking more efficient and cheaper.
Thailand to Improve Supply Chain Finance with Blockchain
The Thai Government is currently looking to leverage the emerging technology in the financial sector, especially supply chain finance. They believe that utilizing blockchain can improve authentication efficiency, in turn facilitating real sector activities.
The Thai government is conducting a scriptless bond issuance which can speed up bond allocation for retail investors from 15 to 20 days and provide better flexibility for bond issuers. The proof-of-concept concerning a scriptless bond issuance is almost complete.
Furthermore, The Bank of Thailand (BoT) is also working with other banks to co-develop a new approach for interbank settlements. The idea is to use a commercial Central bank digital currency to explore potential applications and implications for operational purposes. Thailand hopes to create a cheaper and faster transaction and validation system by removing intermediary processes that exist in their operations today.
Bank of Thailand Remains Strict with Cryptocurrencies
While Thailand is open to blockchain technology, they are strict on cryptocurrencies and do not appear to be changing their position on cryptocurrencies and ICOs shortly.
Thailand mentioned in May 2018 that cryptocurrencies are defined as digital assets and digital tokens. Therefore, they fall under the jurisdiction of Thailand’s Security Exchange Commission (SEC). All cryptocurrency-related businesses need to register with the SEC within 90 days. If they choose not to, they will face specific consequences.
The Finance Ministry expanded the rules to ensure that cryptocurrency brokers, exchanges, and dealers need to register with the correct authorities. While the rules may appear strict, the Thailand Finance Minister Apisak Tantivorawong stated that the law is “necessary to comprehensively regulate cryptocurrencies and digital tokens to prevent money laundering, tax avoidance, and crime.” Tantivorawong believed that the regulations were not designed to stifle cryptocurrencies and ICOs but to protect retail investors.