Hong Kong and Thailand Are Reportedly Developing a Digital Currency

As one may expect, local governments and central banks throughout the world are actively researching potential use cases associated with central bank-backed digital currency. Such is the case in Hong Know and Thailand as well, according to recent reports.

With this in mind, the Monetary Authority of Hong Kong (HKMA), alongside the Bank of Thailand (BoT), have recently issued a press statement highlighting the key factors of their cryptocurrency development collaboration. As such, the two banks started their partnership in May 2019, when they decided to carry out a research project meant to study the main benefits, implications and disadvantages associated with launching a central bank digital currency.

Reports also indicate that the two financial institutions have been carrying out research on separate, standalone wholesale CBDCs, dubbed LionRock and Inthanon. To put things into perspective, their collaboration was mostly constructed on the basis of finding solutions for peer-to-peer payment settlement services via a wholesale CBDC. As such, the scope of the project is to figure out the technicalities behind an institutional CBDC that would be used to transfer money between the two institutions, at an interbank rate, while leveraging quick settlement, security, transparency and lower transaction costs.

Reports indicate that as part of this collaboration, the HKMA also collaborated with the crypto research institute of the Chinese central bank, the People’s Bank of China. This is relevant given the fact that China is actively working on the development its own CBDC, a digital version of the Yuan.

So far, it seems like the two central banks aren’t actively considering launching a public centralized bank-backed digital currency designed to serve as a digital version of local fiat currencies. Therefore, at this point, planning doesn’t include the release of a retail version of this coin. Rather, it will serve as a settlement option between the Hong Kong and Thailand central banks. It is also believed that the digital currency will be used to facilitate corporate payments at a wholesale level, while finalizing the settlement of securities as well.

Based on everything that has been outlined so far, the two CBDCs seem promising, especially for their designed purpose. It is believed that the final project report on the CBDC will be released before the commencement of the 2020 Q1.