Hong Kong, Thailand Inch Towards Joint DLT Solution for Cross-Border Remittances

• The central banks of Hong Kong and Thailand come closer to the implementation of a joint central bank digital currency (CBDC) venture to improve the efficiency of Thai baht and Hong Kong dollar (THB-HKD) cross-border payments.

The Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT) inched closer to implementing a joint CBDC for cross-border remittances with a joint press release of the outcomes and findings of the research dubbed Project Inthanon-LionRock. Besides this, the central banks have also issued an elaborate report which covers the scope, functional and non-functional findings, business benefits and future considerations of the project.

The central banks signed an MoU in May 2019 to initiate the Project Inthanon-LionRock focused on improving cross-border payments with CBDC. Project Inthanon-LionRock involves a DLT-based PoC prototype with a THB-HKD cross-border corridor network. The ten participating banks belonging to Thailand and Honk Kong will thereby get the benefit of transferring funds and conducting P2P forex transactions with effective cost-cutting. The project also implements smart contracts to process transactions based on atomic payment-versus-payment (PvP) manner.

As per the press release, the venture was wound up in December 2019.

Mr. Edmond Lau, Senior Executive Director of the HKMA, stated:

“Our joint research project with the Bank of Thailand marks an important first step to solve the pain points of low efficiency and high costs in traditional cross-border payments. With the use of blockchain technology, the innovative and unique solution not only addresses different technical issues in practical applications but also offers good references to the central banking community on the use of Central Bank Digital Currency.”

 

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