Hong Kong and Thailand’s central banks have stepped closer to implementing a joint central bank digital currency (CBDC) for cross-border payments. On Jan. 22, the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT) officially announced the outcomes of a joint CBDC research project called Project Inthanon-LionRock.
Alongside publishing a joint press release, the banks have issued a detailed 90-page report providing an exhaustive analysis of the potential risks and benefits of CBDCs for real-time money transfers, liquidity management, regulatory compliance, and other aspects of finance.
After the HKMA and the BOT initiated the Inthanon-LionRock project back in May 2019, the banks completed the joint initiative in December 2019, the official announcement reads. The project involved ten participating banks from both Hong Kong and Thailand and featured a Proof-of-Concept (PoC) prototype based on distributed ledger technology. Particularly, Thai participants included banks like Bangkok Bank and Siam Commercial Bank (SCB), while Hong Kong participants included the Hongkong and Shanghai Banking Corporation and ZA Bank. Additionally, the project is supported by major enterprise blockchain consortium R3, which acts as a technology partner, the joint report notes.
Within the project, the banks created a cross-border corridor between Thai baht and Hong Kong dollars in order to allow participating banks to transfer funds and operate foreign exchange transactions on a peer-to-peer basis, which is expected to cut settlement costs and time. The project is based on R3’s blockchain platform Corda and implements smart contracts in order to perform atomic Payment-versus-Payment (PvP) settlements for foreign exchange. A PvP settlement is a mechanism that ensures that the final transfer of a payment in one currency occurs if and only if the final transfer of a payment in another currency or currencies takes place.
Following a successful PoC, the banks concluded that the CBDC has the potential to significantly reduce intermediaries and settlement layers in comparison to the traditional banking payments system as well as prevent risks such as double spending. The joint report reads:
“For example, payers can directly and immediately settle payments with their payees via CBDC in a DLT network as opposed to going through via RTGS intermediaries, including banks, involving multiple debit and credit account entries. The infrastructure for these direct payments further prevents double-spending with temporal transaction orders in place.”
Mathee Supapongse, Deputy Governor of the BOT, was optimistic about central banks implementing emerging technologies like blockchain, claiming that the recent joint CBDC efforts by Hong Kong and Thailand’s central banks is “only the beginning”:
“Though our Project Inthanon has come to the last phase, I believe that it is only the beginning of our next journey where central banks and relevant partners collaborate to tackle existing and incoming challenges, as well as enhance our cross-border funds transfer efficiency…just like the old saying “Going together, we go further”
According to the joint statement, the BOT and the HKMA have agreed to further proceed with joint research in relevant areas. The BOT and the HKMA are not the only banks that are working on cross-border payments projects based on blockchain technology. Earlier in January, SCB, Thailand’s oldest bank, partnered with Ripple to create a blockchain-based mobile app to provide instant and low-cost cross-border payments.
Dubai Government Set To Launch KYC Blockchain Consortium In Early 2020
One of the financial hubs of the Middle East, the United Arab Emirates (UAE), is continuing to expand blockchain-driven developments. The Department of Economic Development (DED) of Dubai has established a Know Your Customer (KYC) blockchain consortium with six major banks. Dubbed “KYC Blockchain Consortium,” the new blockchain-powered regulatory platform is designed to accelerate processes like an exchange of digital customer data and documents while ensuring security.
Scheduled for launch in Q1 2020, the KYC Blockchain Consortium will purportedly become the first project of its kind in the region, the report notes. Ali Ibrahim, Deputy Director-General of the DED, outlined that the effort aims to bring more investment to the region:
“Our strategic alliance with banks to launch the first KYC blockchain platform in the UAE is an important step towards continuing to attract investors to this market.”
Additionally, the consortium-powered ecosystem hopes to boost business as well as regulatory compliance in the UAE. According to the report, the UAE Central Bank and Smart Dubai authority will be monitoring operations of the KYC Blockchain Consortium. The UAE’s newly reported blockchain comes in line with the general growth of blockchain spending in the region.
Governments across the Middle East and Africa region are projected to see at least a 400% surge in their investment to blockchain-based solutions in four years. In October 2019, the UAE accepted cryptocurrency regulation after releasing the draft law for public comment. As reported, the UAE has taken a very positive stance to the crypto and blockchain industry as the country is already hosting a number of blockchain-based initiatives such as digitized trade projects the “Digital Silk Road” and the document exchange platform known as the “Bank Trust Network.”
CBSG PoB Transactions With Their Cross-Carrier Payment System Successful
Further developments to blockchain technology are being tackled every day. One of the biggest challenges is how best companies working on blockchain can make their services not only accessible but also practical for users in different countries. The Carrier Blockchain Study Group (CBSG) Consortium is one such collaboration doing just that. Launched in September 2017, the group provides a secure way for telecom customers to make digital payments directly with their carriers using blockchain technology.
Blockchain platform TBCASoft, a founding member of the CBSG, announced in a Feb. 18 press release that Taiwan-based Asia Pacific Telecom Co. Ltd. (APTG) and a US mobile carrier successfully completed Proof-of-Business (PoB) payment transactions. Using the Cross-Carrier Payment System (CCPS), a blockchain network developed by TBCASoft, transactions can be paid directly in the user’s currency through their mobile carrier.
The CBSG worked with local merchants in Taiwan to complete transactions through APTG’s payment system, Gt Pay. All participants were mobile subscribers with a US-based carrier. APTG Vice President of Marketing Mei-Hui Teng commented on the success of the PoB:
“[We] will be one of the first carriers to launch the cross-border payment service and commercialize it in the Taiwan market. We foresee the strong growth of overseas travel and the popularity of the e-wallet service; our cross-border mobile payment service will create a considerable benefit to APTG’s subscribers. The service can help travelers reduce foreign transaction fees and enjoy the benefits of mobile cashless payments.”
They’re not the first blockchain platform to see the advantages of working together. Samsung Pay partnered with the payment platform Finablr on Oct. 3 to offer cross-border payments to its users.
One Million UEFA Tickets Set To Be Distributed Through Blockchain in 2020
Soccer fans in Europe will join the ranks of early blockchain adopters thanks to a new initiative by the Union of European Football Associations (UEFA). According to a Feb. 17 announcement, UEFA will distribute over one million soccer match tickets via a blockchain-enabled mobile application.
The organization claims that this new ticketing system will make “entry into the stadium smooth, safe and secure.” The new blockchain-based mobile ticketing solution is meant to prevent the duplication and replication of tickets by “QR codes only being activated by Bluetooth once fans are in close proximity to the stadium.” The app will be available for download toward the end of May for both Android and iOS devices. Tickets will be delivered no later than seven days before the match and “UEFA expects to deliver over one million mobile tickets to fans across all 51 matches.”
UEFA decided to adopt this system in an attempt to facilitate ticket distribution to what is expected to be the most in-demand UEFA cup ever. UEFA also stated that digital ticketing will help curb paper consumption and be more convenient for soccer fans:
“Supporters who purchase ‘Follow my team’ tickets will receive their mobile tickets only once their team has qualified for a specific match. The ability to deliver mobile tickets to fans close to matchday will considerably enhance the fan journey, as fans will no longer be required to visit ticket collection points to exchange ticket vouchers. ”
The initiative builds on the successful deployment of the mobile ticketing system in August 2018 for the UEFA Super Cup soccer match between Real Madrid and Atletico Madrid held in Tallinn, Estonia.
Many sports franchises and event organizers are turning to blockchain for ticketing, as the technology promises to be a highly effective way to prevent forgery and ensure convenience. Ticketmaster’s vice president of blockchain products Sandy Khaund said that the technology can prevent secondary ticket markets from popping up and ensure that “tickets end up in the right hands.” The CEO and founder of EventChain, Ashton Addison, said:
“The whole point of implementing blockchain in the ticketing industry is to bring back fairness to the artists, event organizers and fans. For example, a major problem facing the industry is counterfeit tickets. Blockchain can prevent this by allowing attendees to verify the authenticity of their tickets. This also turns tickets into scarce digital assets, which are unable to be double sold.”
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