The Bank of Thailand, or BOT, is the central bank of Thailand, responsible for all central banking functions.
Its major role is to create a stable financial environment for sustainable economic growth in order to achieve continuous improvement in the standard of living of the people of Thailand.
And this time, the bank has become the first in the world to use a blockchain-based platform for government saving bonds, issuing a total of $1.6 billion within two weeks.
In has for a very long time, that sales of government savings bonds were complex, multiparty, and a time-consuming process. Sales relied on a non-real-time system, with duplicated validation steps and manual reconciliation that is prone to data errors.
But with blockchain, BOT wants to change this.
The blockchain technology that uses IBM Cloud, allows investors to benefit from speedy bond issuance, reducing a process that previously took 15 days to just two days.
The efficiency provided by blockchain also reduces operational complexity and the overall cost of issuing bonds.
In other words, using blockchain, BOT managed to streamline the process of bond issuance for issuers, underwriters, registrars, investors and key ecosystem participants.
The benefits and business value of using blockchain technology for government bond distribution is shared across those stakeholders.
What's more, the government savings bond platform also becomes an immutable, real-time single source of truth for network participants.
And all that by offering greater transparency
In addition, Thai investors can start purchasing bonds up to the maximum value of their individual allocated quota from a single bank.
According to The Thai Bond Market Association, the outstanding Thai bond market stood at $421 billion as of December 2019.
Government bonds dominate the Thai bond market, with outstanding value of $157 billion in 2019.
According to Patama Chantaruck, VP for Indochina Expansion and MD of IBM Thailand:
"IBM is proud to bring our world-class blockchain platform and IBM Cloud to support Bank of Thailand, and work side-by-side with them in achieving this important milestone for Thailand's financial industry."
Thailand is already an active adopter of blockchain technology, by having implemented a dynamic ecosystem extending to both public and private entities.
For example, Thai Customs Department has been using TradeLens, a blockchain-based global trade digitization to improve speed, accuracy and security of local and international shipping activities. The blockchain technology has also been deployed on other sectors, including finance, insurance, government and also others.
And this blockchain-based government bond, was created with the involvement of eight institutions.
They include: BOT, Public Debt Management Office, Thailand Securities Depository Co., Ltd, Thai Bond Market Association and selling-agent banks, including Bangkok Bank, Krungthai Bank, Kasikorn Bank, and Siam Commercial Bank, with IBM Blockchain as the technology and cloud platform partner.
Following this blockchain-based government bond, BOT has plans to extend the program to all other government bonds, targeting both retail and wholesale investors.
