In brief
- The Bank of Thailand is using blockchain technology for government savings bonds.
- Blockchain technology will also be used for all other government bonds in the future.
- The move is part of a wider blockchain trend in Thailand.
On September 11, 2020, the Bank of Thailand (BOT) announced a blockchain-based platform for government savings bonds. Today, IBM, which offered the blockchain technology for the platform, announced that $1.6 billion in government savings bonds were successfully sold within a week of launch.
Issuing government savings bonds has historically been a complex and time-consuming process, involving multiple parties and high operational costs. With blockchain technology, investors benefit from faster bond issuance, more transparency and greater efficiency.
"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," said Patama Chantaruck, vice president for Indochina Expansion and managing director of IBM Thailand.
Prior to the adoption of blockchain technology, IBM said the issuance process could last up to 15 days. Now, the blockchain solution has allowed the government savings bond platform to become "an immutable, real-time single source of truth for network participants, which minimises the redundant validation and reduces the costs of reconciliation," IBM said in a press release.
In addition, the IBM press release listed decreased workloads for issuers, underwriters and registrars as an advantage born out of the new blockchain platform.
"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,” added Chantaruck.
This undertaking required collaboration from eight institutions, including the Bank of Thailand, the Thai Bond Market Association and Thailand Securities Depository Co., Ltd. Several Thai banks including Bangkok Bank were also involved.
Prior to this initiative, Thailand had already begun embracing blockchain technology. Last year, the Thai Customs Department began using TradeLens, a blockchain-based platform that enables container tracking and information sharing solutions for the international shipping industry.
Now, the Bank of Thailand plans to extend blockchain to all other government bonds, continuing the country's continuing embrace of blockchain technology.