Bank of Thailand Launched the First Blockchain-Based Government Savings Bond Platform
October 5, 2020 1:31 pm
The Bank of Thailand (BOT) launched the world’s first government savings bond issuing platform using IBM’s blockchain technology.
According to IBM’s official announcement on Oct. 5, 2020, the central bank sold more than USD 1.6 billion worth of savings bonds in just two weeks of the launch.
Earlier, the sale of government savings bonds was a complex, multiparty, time-consuming process that relied on a non-real-time system, with duplicated validation steps and manual reconciliation prone to data errors. However, with the use of blockchain technology, the platform decreased the redundant validation of documents involved in bond issuance. It enables investors to have reduced the bond issuance time from 15 days to just two days. The increased efficiency of the process has reduced operational complexity and the overall cost of issuing bonds.
The aim to develop a secure and efficient government bond infrastructure included collaboration among eight institutions including Public Debt Management Office, Thailand Securities Depository Co. Ltd., Thai Bond Market Association and four other selling-agent banks i.e. Bangkok Bank, Krungthai Bank, Kasikorn Bank, and Siam Commercial Bank with IBM Blockchain as technology and cloud platform partner.
The Bank of Thailand (BOT) now plans to extend the use of blockchain technology across all other government-issued bonds for targeting both retail and wholesale investors.
Adoption of Blockchain Technology by Thailand
The Thailand central bank has been actively adopted the blockchain and cryptocurrency space, with a dynamic ecosystem extending to both public and private spheres. Such as:
In 2019, the electronic letter of guarantee platform and network competed in by 22 Thai banks and 15 companies successfully went live and now manages approximately USD 300M in guarantee letters.
Thai Customs Department also became the second government agency in southeast Asia to use TradeLens, a blockchain-based global trade digitization platform that improves the speed, accuracy, security of local and international shipping activities.
In June, the bank launched a payment prototype system to test real-life business use cases of its central bank digital currency (CBDC) and plans to test it with large-scale enterprises.
The latter month, the bank deployed its CBDC, also reported being planning to use its digital currency for financial transactions to transact with the Hong Kong Monetary Authority.
The Bank of Thailand is also pursuing smart contracts and decentralized finance use cases for its national digital currency.