In today’s digital finance world Cryptocurrency (cryptocurrency), also known as digital currency It has gained widespread attention as a medium of exchange of value that will replace the use of cash. Or even electronic money (e-money) that is popular today? Central banks around the world have turned to study the possibility of issuing it. Central Bank Digital Currency ( CBDC ) or digital currency issued by the central bank of each country To be used as a medium of exchange of value that will represent real money.
This article MoneyGuru will take you to know about Digital currency or CBDC at the Bank of Thailand The system is being developed and tested. To push Thailand to have a system that is ready to use as many countries continue.
awakening matter Global Central Bank CBDC Digital Currency
Bank of Thailand Provides information about the CBDC as a digital currency issued by a central bank. which qualifies as a medium to pay for goods and services can maintain value and can be an accounting unit This is different from cryptocurrencies like Bitcoin, Ether or Ripple that are issued by the private sector. and has a volatile value from speculative use Therefore, it is not suitable for use as a medium for payment of goods and services.
Information from the Bank of Thailand It also states that CBDCs can be divided into two types: for transactions between financial institutions (wholesale CBDC) and for retail transactions of businesses and citizens (retail CBDC).
Since China officially introduced the RMB digital currency in early 2020, other countries have continued to study and experiment with their own digital currency systems as well.
- Swedish e-krona test
- issuing educational and design guidelines like the Bank of England and Canada
For that Thailand The Bank of Thailand (BOT) together with 8 commercial banks initiated “Project Inthanon” since 2017 to study the efficiency and feasibility of using CBDC in the financial institution sector. Including a trial of cross-border remittances with the Hong Kong Monetary Authority The results of the test and the knowledge of the project It is very beneficial to the development of Thai digital currency in the future. which must focus on financial stability and creating innovations that support the private sector
The final goal of the development of a payment system using the CBDC, Assistant Governor. Bank of Thailand’s Financial Markets Division Ms. Wachira Aromdee said that is that Thailand must have a system that is ready to use as needed If by the time most countries in the world are ready to transition to the digital economy. This means having a digital currency to support the economy in the new world. At the same time, the central bank It will still maintain its ability to stabilize the financial system. and the country’s monetary policy
Cryptocurrency and international expansion
In the past, the Bank of Thailand (BOT) has collaborated with the Hong Kong Monetary Authority (HKMA) to develop a digital currency. issued by the central bank at the financial institution level for use in international money transfers under the project Inthanon-LionRock Phase 2 is currently being expanded in collaboration with the Central Bank of the United Arab Emirates (CBUAE) and the People’s Republic of China’s Central Bank Digital Currency Institute (PBC DCI) under the Multiple Currency CBDC Bridge project. Project (mCBDC Bridge), which aims to reduce costs and increase the efficiency of international money transfers. and expanding the model to other countries later, the Wholesale CBDC design incorporates Distributed Ledger Technology (DLT).
for the project Inthanon-LionRock Phase 2, the BOT and HKMA have broadened the scope of CBDC applications as follows:
- Added design to support multi-currency CBDC in preparation for expansion to more countries.
- Add participant type besides the financial sector To consider the possibility of opening the Corridor Network to include other participants such as companies with high international transaction volumes, importers-exporters and stock exchanges.
- Added technical testing such as privacy and mass transaction support. (scalability)
The Phase 2 project uses Hyperledger Besu technology based on Ethereum as it is an open technology and has the potential to connect with other DLT systems to support various forms and innovations in finance. future
In terms of expanding the test scope under the new project “mCBDC Bridge”, which is a continuation of the project. Inthanon-LionRock Phase 2, in conjunction with CBUAE and PBC DCI, aims to reduce barriers to trade, investment and compliance activities for money transfers between four countries, as well as more realistic, diversified business testing. In this cooperation, there will be more studies in many areas, such as defining the governance structure of the system. Confidentiality and Compliance Standards by Country
Reduce intermediaries for international money transfers
Currently, international money transfers at the financial institution level rely on intermediaries known as intermediaries. correspondent bank, a financial institution that can conduct transactions on both the sending country and the receiving country As a result, the transaction costs are high. take a long time Therefore, the use of DLT features that reduce the role of intermediaries can be used to design a central network (Corridor Network) that financial institutions of each country can connect to such systems and use CBDCs issued by the Central Bank of Thailand. each country to transfer money between each other Make international money transfers no longer required through intermediaries.
In conclusion, by the Bank of Thailand The mCBDC Bridge project is expected to foster cooperation from the central bank. both in Asia and other regions to participate in the study of new financial technologies and innovations that may be used to develop the infrastructure for international money transfers After the completion of the project A test evaluation will be conducted to determine the feasibility of further implementation of the mCBDC Bridge project in international remittance, trade and investment.
If the development of this system is successful Thai people like us May have to adapt and learn to use the digital currency system as well.
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