Bank of Thailand to Launch State-Issued Digital Currency

The central Bank of Thailand revealed on Wednesday plans to introduce a state-issued cryptocurrency on R3's Corda blockchain.

As per details of a press release, BoT referred to the protocol as a "Wholesale" Central Bank Digital Currency, meaning its use is limited to financial institutions and related markets.

The clarification puts to rest rumors of a state-controlled cryptocurrency for the citizens, which would be referred to as a "Retail" CBDC. The experiment will see BoT partner with eight major international and Thai and banks including Bangkong Public Bank, Krung Thai, Siam Commercial Bank, HSBC and Standard Chartered, among others.

BoT describes the development as a "Collaborative milestone," presumably highlighting the number of banks agreeing to partner on the project despite any inhibitions in their personal capacity.

All eight partners will design a proof-of-work protocol that will run the architecturally decentralized blockchain system, with BoT expecting the first prototype available in early 2019.

The concept of a CBDC continues to draw both flak and appreciation from authorities around the world.

For the uninitiated, a CBDC denotes a cryptocurrency whose legality, protocol and functionality are controlled by a central state authority.

In April 2018, R3's director Anthony Lewis stated the year would see heightened efforts by regulatory authorities and banks to develop a CBDC, making his prediction based on the rise of institutions realizing the potential of blockchain and state-issued crypto-tokens.

Retail CBDC's remain a gray area for authorities.

In March 2018, the Bank of International Settlements published a 34-page report on state-issued digital currencies, concluding that "a general purpose [retail] CBDC could give rise to higher instability of commercial bank deposit funding."