The Bank of Thailand (BOT) and Hong Kong Monetary Authority (HKMA) had initiated a joint decentralized ledger project, titled Inthanon-LionRock, which was aimed to test the cross border payments on DLT. The banks had also issued a detailed report earlier which covered the complete project, including its scope and findings.
The Project Inthanon-LionRock was designed to look into the possibility of using decentralized technologies for centrally backed digital currency (CBDC). The project tested a cross border payment of the Thai Baht (TBH) and Hong Kong Dollar (HKD) pair. There are 10 banks that are participating in the project and will be able to leverage the technology to conduct direct peer to peer ForEx transactions.
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.
The use of decentralized technology is faster, secure and much more efficient than today’s legacy systems employed by banks, allowing the participants to give faster services to their clients while reducing the cost of transactions.
There has been a flurry of financial institutions and governments in Asia who are exploring the possibility or actually using different decentralized and blockchain technologies for cross border payments and remittances. Federal Bank, a major private bank in India, has already started using the Ripple network for remittancesfrom the Middle East. According to the data by the bank, it has a 15% share in the Indian remittance market.
Shyam Srinivasan, CEO of Federal Bank, had said,
Federal Bank is an important part of the remittance eco-system to India, so, it is only natural for us to offer the latest technology to our customers and remittance partners such as exchange houses and banks.
West of India, Telenor Pakistan, a subsidiary of Norway’s telecom company Telenor, had also announcedthrough its micro financing arm, Telenor MicroFinancing Bank (TMB) that it had teamed up with their transaction service (Telenor EasyPaisa) to offer easy remittances to Pakistan using blockchain technology based off AliPay’s decentralized network.
CEO Ant Financial, the company behind AliPay, Eric Jing said,
the new remittance service is one of the examples of how emerging technologies can help countries meet their digital and financial inclusion goals.
Decentralized Ledger Technologies (DLTs), like blockchain, are increasingly becoming popular all over the world in remittances since they provide easier, faster, cheaper and much secure way of sending money that the traditional banking systems used today.