The Thai central bank is currently investigating the implementation of smart contracts and decentralized financing (DeFi) for their national digital currency, the digital baht.
Vijak Sethaput, lead developer of the Central Bank of Thailand’s (BoT) Inthanon’s Central Bank’s digital currency project, discussed the progress of the country’s CBDC in an interview hosted by a global think tank for central banks, the official forum of monetary institutions. and Financieras on August 13th.
Sethaput was supported by Sky Guo, CEO of New York-based blockchain company Cypherium, which focuses on global CBDC implementations and interoperability.
During the interview According to Guo, global jurisdictions can borrow from the DeFi model to allow valued parties to issue digital assets backed by real-world assets like real estate and stocks and use them as collateral to secure loans in a CBDC.. According to the executive, such developments could bring enormous liquidity to the economy.
Sethaput said the central bank was following recent developments in the DeFi industry. However, before attempting to adopt the new technology in Thailand’s native cryptocurrency, the central bank had to solve two main problems for DeFi: customer identification and privacy.
In the interview, Sethaput stated that the implementation of smart contracts is a central point for the next phase of the Inthanon project:
“We examined the functionality of the smart contract described by Sky. We mimicked the bond lifecycle so that the bond itself can pay coupons and be exchanged between the parties. We have what is known as a buyback so that you can sell them and then get them back at another point in time and also in trade. “
The BoT’s comments take place amid the growing hype surrounding the DeFi industry. DeFi is a new tool that allows crypto entrepreneurs to recreate traditional financial instruments in a decentralized architecture beyond the control of corporations and governments.. The DeFi industry broke records in 2020. Companies around the world are investing more and more money in the cryptocurrency sector.
Currently, the total insured value in DeFi markets is $ 5.24 billion. This is based on data from the leading industry website DefiPulse.com.
As Cointelegraph reported, the Bank of Thailand implemented its CBDC for financial transactions with some large companies earlier this year. The BoT appears to be entering a new phase and is now planning to implement the digital currency for transactions with the Central Bank of Hong Kong.