Posted 12 months ago | by Ben Armstrong
Thailand's Central Bank Takes a Close Look At DeFi Use Cases
Smart contracts and decentralized finance (DeFi) became a hot topic in Thailand blockchain industry when the national central bank expressed interest in applying these innovations to the Digital Baht, Thailand’s digital currency.
The news is based on statements made by Vijak Sethaput, an executive at the central bank, in an interview chaired by the global think tank on central banking. Sethaput currently occupies a senior developer role for the Bank of Thailand’s (BoT) Central Bank Digital Currency (CBDC) project Inthanon.
Thailand is Looking for New Ideas
Hosted by the Official Monetary and Financial Institutions Forum, the conversation on August 13 also saw the participation of Sky Guo, CEO of Cypherium – a New York-based blockchain company that targets global connectivity and implementations of CBDC.
In a separate statement, Guo highlighted the potential of applying the DeFi model to allow competent parties to provide digital assets supported by the real estate market, such as property and inventories, as collateral for secure CBDC loans. The CEO believes that these innovations could lead to enormous liquidity for the economy.
Sethaput said that the central bank always keeps an eye on recent DeFi advances, but they must address two primary issues around DeFi, consumer identification and privacy, before attempting to introduce the latest technology to the native cryptocurrency in Thailand.
More to Come
The next phase of the Inthanon project will focus primarily on smart contract implementation.
“We have explored functionality of the smart contract like Sky has described. We have mimicked the bond lifecycle, so the bond itself can pay coupons and can exchange between the parties, we have something called repurchase, so you can sell it and then you can get it back in another time and also the trading.”
The opinion of BoT comes when the interest in DeFi has been increasing.
Created with the aim of developing an open financial system to everyone, DeFi is a revolutionary technology and an ambitious attempt to decentralize core traditional financial use cases, such as transactions, lending, investments, asset management, payments and security through the use of blockchain.
In 2020, the DeFi industry reported massive increase, with companies around the world’s growth of investment in the crypto industry.
Cointelegraph’s report announced that the CBDC’s deployment has been undertaken by the Bank of Thailand, to carry out financial transactions with some large corporations earlier this year. The BoT’s next mission is to create the digital currency for transactions with the central bank of Hong Kong, officially entering a new phase.
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