IBM Canada head office building in Markham near Toronto, Ontario, photographed on October 30, 2018. JHVEPhoto/Shutterstock
On September 5, IBM announced the launch of its new and world first government bond savings platform in cooperation with the central Bank of Thailand (BOT), issuing $1.6 billion within just two weeks.
According to the announcement, the platform leverages blockchain technology on IBM Cloud in order to streamline the processes of bond issuance by cutting down on the number of operations required for a single transaction. The new protocol is said to provide a real-time system with faster validation steps that remove the need for manual reconciliation, reducing potential errors and the overall time frame of the process.
The new platform will also supposedly assist Thai investors in purchasing bonds up to the maximum value of their individual allocated quota from a single bank while reducing costs connected to reconciliation. Along with BOT and IBM Blockchain, six other institutions took part in the development of the new government bond infrastructure, including Thailand Securities Depository Co., Ltd, Thai Bond Market Association, and Public Debt Management Office with other selling-agent banks, including Bangkok Bank, Krungthai Bank, Kasikorn Bank, and Siam Commercial Bank.
“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,” said Patama Chantaruck, VP for Indochina Expansion and MD of IBM Thailand. “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.”
After the immediate success of the new platform, Bank of Thailand shared that they are planning to extend blockchain to all other government bonds, targeting both retail and wholesale investors. According to the announcement, 22 Thai banks and 15 companies previously participated in the electronic letter of guarantee (eLG) platform and network, which currently handles $300 million in guarantee letters.
As the new government saving bonds platform allows for faster bond issuance, decreased workloads, and reduced operational cost across the value chain, more pilots and applications of blockchain are being rolled out in order to bring transparency and efficiency to the finance sector in Thailand.