Blockchain technology is continuing its streak of penetrating the global financial market, creating solutions for different countries. The latest sovereign state to enjoy this technology’s benefits is Thailand, as the Asian country has issued the world’s first blockchain-backed savings bond.
$1.6 Billion Worth of Units Issued
Earlier today, tech giant IBM announced that it had signed an agreement with the Bank of Thailand to launch the latter’s savings bond. According to the announcement, the bond, which launched last month, has sold over $1.6 billion worth of units.
As the official announcement explained, the Bank of Thailand has used blockchain to reduce the bond issuance time, cutting it from 15 days to just two. With increased efficiency, the Bank has successfully cut operational cost and several other redundant documentation factors that typically impede the traditional bond-issuance process.
Patama Chantaruck, IBM’s Vice President for Indochina Expansion and the Managing Director for IBM Thailand, said in the press release:
“Bank of Thailand’s success with the government savings bond project is the latest example of how blockchain technology can redefine the way businesses operate by simplifying complex processes resulting in fast, transparent, secured and efficient multiparty collaboration.”
The blockchain-backed bonds also include input from several other organizations. These include the Thai Bond Market Association, the Public Debt Management Office, and the Thailand Securities Depository Co.
Thailand’s Blockchain Play
It also underscores what has been an impressive year for Thailand and its blockchain aspirations. The country has been making significant progress applying blockchain to its financial industry, with the most prominent move being its work with a Central bank Digital Currency (CBDC).
In June, the Bank of Thailand announced that it had launched a pilot program to test the real-life applications of a possible CBDC. At the time, the announcement confirmed that the Bank was looking into testing the CBDC for large-scale enterprise applications. Success with that will provide the opportunity for tests with all business operations.
With CBDC payments, the Bank of Thailand aims to build a more efficient payment system to improve fund transfers’ flexibility and improve payment speed between suppliers.
In August, Vijak Sethaput, senior developer for the CBDC project, said in an interview with the Official Monetary and Financial Institutions Forum that they were considering bringing in some elements of decentralized finance (DeFi) into the project as well.
As Sethaput explained, the DeFi model allows qualified parties to issue digital tokens backed by real-world assets (stocks, real estate, and more) to collateralize and secure loans. Developments like these could improve the Thai economy’s liquidity.
The developer added that the Bank is monitoring DeFi developments to examine the feasibility of incorporating its technology into their CBDC project. For now, two primary issues impede the incorporation – privacy and customer identification.
As for IBM, the tech conglomerate has continued to be a blockchain pioneer. The company’s blockchain platforms have helped different countries and companies optimize their operations, showing that the technology has real-world benefits once and for all.