The central banks of Hong Kong and Thailand are working to launch a digital currency to facilitate cross-border trade.
Following a signed agreement to bolster financial technology collaboration, the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BOT) will jointly launch a digital currency to enhance cross-border trade, valued at $19.6 billion in 2018.
HKMA’a cross-border payment platform leverages blockchain and the «depositary receipt corridor network» to enable companies in both markets to settle wholesale payments with one another directly, as opposed to the current conventional method of using multiple intermediaries that often cause delays.
The roll-out will include a two-tier digital token with one focused on the issuance of tokens to Hong Kong banks participating in the pilot program (called «Project LionRock-Inthanon»); and another for banks to distribute to their corporate customers to settle wholesale payments with other banks or companies, according to an SCMP report.
HKMA is currently working with HSBC and ZhongAn Technologies International while BOT is working with HSBC, Standard Chartered, and a handful of local lenders such as Kasikorn Bank and Krungthai Bank to further research and develop the project. More details on a proof-of-concept study are expected to be unveiled in the first quarter of 2020.