In the wake of the uprising of cryptocurrency, the Central Bank of Thailand made a rather interesting announcement on Monday, March 19. 14 Thai banks have joined forces to create the Thailand Blockchain Community initiative, which will be responsible for the digitization of letters of guarantee on a shared blockchain platform.
The country’s top banks, namely The Bangkok Bank, Krung Thai Bank, Siam Commercial Bank and Kasikornbank, will all participate in the initiative, which utilizes the Linux Foundation’s Hyperledger Fabric as a technology platform.
“With this infrastructure sharing, banks do not need to invest on their own. “Interoperability enhances efficiency, reduces costs in our financial sector and addresses the needs of the consumer and the business sector.” Veerathai Santiprabhob, the governor of the Bank of Thailand, said at a press conference according to Nikkei.
The group’s blockchain platform was first launched by Kasikornbank in collaboration with IBM in July 2017 and is similar to Digital Trade Chain, reported by BTCManager in January 2017 by banking giants Deutsche Bank and HSBC.
Use of the Blockchain to Ensure Ease of Administration
Thailand is known for its lengthy and time-consuming process when it comes to administering letters of guarantee; which are issued by the banks to guarantee their clients’ payment obligations. Digitizing the documents and shifting them to the blockchain can dramatically reduce the turnover time to just 30 minutes, as heard by sources.
“For the business sector, the Thailand Blockchain Community Initiative will reduce the complexity of connecting to the same financial services provided by different banks, facilitate data verification on the same blockchain network, mitigate risks of counterfeiting and increase timeliness as well as security,” Thai newspaper, The Nation, quoted Santiprabhob.
Initial Testing to Commence Soon
Thai Central Banks’ ‘sandbox’ is where the system will be tested initially and used to issue Letters of Guarantee to state-owned enterprise auctions and other domestic trading operations.
The Electricity Generating Authority of Thailand, a state-owned energy company, and Siam Cement Group, the second largest company in Thailand, are both poised to participate as well. By September 2018, the system is anticipated to be live.
With this ever-increasing demand and obsession with cryptocurrency, it becomes essential for blockchain communities to be formed in order to keep them in check, and that’s exactly what Thai banks are providing us with.