The Bank of Thailand (BoT) has announced a new project aimed at developing central bank digital currency (CBDC) to facilitate interbank settlement.

Speaking at an event in Singapore, BoT governor Veerathai Santiprabhob announced the CBDC-focused initiative “Project Inthanon”, while detailing a number of other fintech and blockchain initiatives undertaken by the central bank.

“Another project in the pipeline is the “Project Inthanon” in which the Bank of Thailand and banks will co-develop a new way of conducting interbank settlement using wholesale central bank digital currency or CBDCs. Like other central banks, our goal is not to immediately bring CBDC into use, but rather to explore its potential and implications for back office operations,” Santiprabhob said.

He said that the central bank is working closely with the financial industry to apply blockchain technology to various banking applications.

Earlier in March, the ‘Thailand Blockchain Community Initiative’ was officially announced, which is a collaborative initiative between 14 Thai banks and 7 leading businesses and state-owned enterprises to utilize blockchain technology in financial services. The initiative is working on a pilot project to offer blockchain-based letters of guarantee.

“This project is expected to become operational in the second half of this year,” Santiprabhob added.

Other blockchain initiatives include its application in supply chain finance and scriptless bond issuance, among others. The proof-of-concept of scriptless bond issuance is almost complete, and production is expected to begin in the very near future, Santiprabhob said.

“These efforts should pave way for faster and cheaper transaction and validation due to less intermediation process needed compared to the current systems,” he added.