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Thailand Announces State-Backed “Bond Coin” to Facilitate Faster Security Settlements and Clearance

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Thailand Announces State-Backed “Bond Coin” to Facilitate Faster Security Settlements and Clearance

The Thailand government is swiftly taking steps to adopt and implement cryptocurrencies and blockchain technology within its administration. Local reports on July 16, 2018 confirmed that a prominent securities body in Thailand is developing a digital token to facilitate settlement clearing of corporate bonds.

Bond Coin to Streamline Current Processes

According to The Bangkok Post, the Thai Bond Market Association (TBMA) is studying blockchain technology and developing a “Bond Coin,” a state-run token built over a private blockchain to ensure transactions between permissioned participants such as regulators and bond issuers. Thailand’s Security and Exchange Commision (SEC), the country’s financial watchdog, has permitted TBMA to execute the plan for developing the private project in three phases. Bond Coin is expected to launch in August 2019.

The private blockchain will provide participants with an information sheet detailing payment stages, interest rates, and other time-sensitive information. TBMA aims to shorten the relevant traditional banking processes from seven to ten days for processing, to one day.

As stated by TBMA president Tada Phutthitada, Bond Coin’s first phase involves the development of a “bond registrar subscription system” for use in verifying bond transactions between participants. Notably, smart contracts will be deployed in the initial stage, primarily to handle subscriptions, verifications, and a settlement information system.

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The project’s second phase is expected to be completed within nine months, or early 2019, and will encompass additional features such as bond deposit servicing and system development. The third phase involves integrating the previous two project legs into the Bond Coin, including a clearing and settlement infrastructure using the digital token. After completion, the private blockchain is expected to cut down clearing of corporate bonds from two days to presumably less than 24 hours, as middlemen prevalent in the current system will be eliminated in the soon-to-come Bond Coin.  

Thailand Building New Industry

For Thailand, a constitutional monarchy, the development comes quickly after a slew of regulatory changes which supplement the burgeoning cryptocurrency sector. The country is among a handful to introduce ICO regulations, which came into effect on July 16, 2018. Token issuers can now access dedicated portals to submit their projects for vetting. Once approved, the ICO vetting portal would, in turn, forward the list to the Thai SEC for final screening.

Additionally, several financial firms in the country that are registered with Thailand’s Association of Securities Companies (ASCO) have expressed interest in creating a jointly-owned digital currency exchange, as reported by BTCManager.

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