Thailand’s central bank is looking at DeFi implementations for its digital baht
The central bank of Thailand is currently considering a smart contract and implementing DeFi for its national digital currency – the digital baht.
Thailand’s central bank eyes DeFi use cases for the digital baht
In an interview at the Forum of Financial and Monetary Institutions, Vijak Sethaput, senior developer for Central Bank of Thailand’s central bank digital currency project Inthanon, discussed the progress of the country’s CBDC. The interview also featured Sky Guo, CEO of Cypherium, focused on discussing global CBDC implementations and increasing interoperability.
“Global jurisdictions can borrow from the DeFi model to allow eligible parties to issue digital assets and use them as collateral to secure loans in the CBDC.”
According to the CEO, such developments can bring enormous liquidity to the economy.
Meanwhile, Sethaput said that the central bank is monitoring recent developments in the DeFi sector. Before attempting to adopt new technology for Thai cryptocurrencies, however, the central bank must address two main problems surrounding DeFi – customer identification and privacy.
In the interview, Sethaput said that the implementation of smart contracts is the main focus for the next phase of the Inthanon project:
“We explored the function of smart contracts as described by Guo. We also refer to the life cycle of a bond, so the bonds themselves can be used to pay off coupons and exchanged between parties. We have a service called acquisitions. So you can sell it and then get it back at another time. ”
The comments of the Central Bank of Thailand come in the context of an ever-evolving DeFi industry. DeFi is a new tool, allowing crypto entrepreneurs to re-create traditional financial instruments in a decentralized architecture, out of the control of companies and governments. The DeFi industry broke records in 2020, with companies globally increasingly pouring money into the cryptocurrency sector. Currently, the total value locked on the DeFi market reaches $ 5.24 billion.
The Central Bank of Thailand implemented its CBDC for financial transactions with some large enterprises earlier this year. Seemingly entering a new phase, BoT is now planning to launch a digital currency for Hong Kong’s central bank transactions.
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