Bank of Thailand has just announced the rollout of the world’s first blockchain-based platform that facilitates the issuance of government savings bonds. Only a week after launch, the Bank of Thailand has already sold $1.6B worth of government savings bonds on the platform.
Bank of Thailand And IBM Blockchain
According to a recent press release, the Bank of Thailand has successfully launched the world’s first blockchain-based platform that enables the issuance of government savings bonds. By leveraging IBM Blockchain infrastructure, Bank of Thailand has already processed $1.6B ( USD ) in government savings bonds over the last two weeks.
With government bonds accounting for significant market share of thai bond markets, the push into blockchain has the ability to revolutionize the experience for clients on a daily basis. It is important to note that the Thai bond market was valued at $421B in December of 2019. Government bonds accounted for 37%, with about $157B USD being outstanding.
What This Means For Bond Issuance
Bond issuance around the globe has historically been a timely process. With purchasing and settlement being significantly different than buying traditional stocks, it can create a stressful environment for investors. With Bank of Thailand launching a blockchain-based platform for government saving bond issuance, they stated that the original 15 day processing time has been slashed to 2 days. In doing so, the bank believes that this will also lower their overall costs affiliated with issuing the bonds.
The blockchain infrastructure allows the Bank to monetize legacy system inefficiencies such as manual reconciliation, and a non-real-time system. The platform powered by IBM Blockchain will benefit issuers, underwriters, registrars, investors, and other key participants.
By applying blockchain immutability, Bank of Thailand will be operating one of the most transparent bond issuance platforms in the world. In addition to transparency, government bond issuance will be seamless and much more cost efficient compared to other banks.
Patama Chantaruck, the VP for Indochina Expansion and MD of IBM Thailand, commented on the announcement stating that:
“Bank of Thailand’s success with the government savings bond project is the latest example of how blockchain technology can redefine the way businesses operate by simplifying complex processes resulting in fast, transparent, secured and efficient multiparty collaboration.”
Patama Chantaruck added that:
“IBM is proud to bring our world-class blockchain platform and IBM Cloud to support Bank of Thailand, and work side-by-side with them in achieving this important milestone for Thailand’s financial industry.”
IBM Blockchain Platform
Enterprises around the world are discovering the ground breaking opportunities that blockchain infrastructure can offer. In a push to monetize consumer confidence, blockchain provides that extra layer of transparency and trust. The IBM blockchain platform has already worked on 500+ different projects. Aside from servicing banking and finance, IBM is working with other sectors like supply chain, trade finance, government, insurance, and many others.
On a global basis, Thailand has made one of the strongest pushes into blockchain technology. The BCI ( Thailand Blockchain Community Initiative ) had also joined forces with IBM to enhance their blockchain letters of guarantee network for 22 different banks. The network currently handles around $300M USD in guarantee letters. Outside of banking, Thailand has focused on blockchain in other industries like supply chain.
Last year it was announced that Thai customs had joined the Tradelens platform that was developed by IBM. The platform makes it easy to process cargo at international trade ports. In an industry that has historically been reliant on paper, Tradelens is digitizing the shipping industry to add much needed transparency. Thailand also plans to introduce blockchain to insurance, government, and many other sectors.
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