Hong Kong Central Monetary Authority (HKMA) and Bank of Thailand (BOT) recently embarked on the next phase of their planned joint Central Bank Digital Currency (CBDC) for cross-border payments. On January 22, 2020, the monetary authorities announced the results of their study project called “Project Inthanon-LionRock,” which suggests that the blockchain-based network can facilitate trade settlements at a reduced cost.
A 90-page report was released the joint press release that uses exhaustive analysis of the potential risks and benefits of CBDCs for real-time money transfers, liquidity management, regulatory compliance, etc. HKMA and BOT commenced the Inthanon-LionRock project in May 2019. The project involved ten participant banks from both countries like Bangkok Bank, Shanghai Banking Corporation, Siam Commercial Bank, ZA Bank, etc.
The technological backup to the CBDC project came from R3’s Corda blockchain platform. The banks created a cross-border corridor between Thai baht and Hong Kong dollars to allow interbank funds transfer and forex transactions on a peer-to-peer basis. The research outcome indicates that the CBDC can substantially reduce intermediaries and settlement layers and prevent double-spending.
Mathee Supapongese, Deputy Governor of the BOT, positively quoted, “Though our Project Inthanon has come to the last phase, I believe that it is only the beginning of our next journey where central banks and relevant partners collaborate to tackle existing and incoming challenges, as well as enhance our cross-border funds’ transfer efficiency…just like the old saying, “Going together, we go further.”