invezz.com
Earlier today, the Bank of Thailand (BOT) managed to successfully launch the first blockchain-based platform for government saving bonds in the world. The new platform was launched in partnership with IBM, using the tech giant’s blockchain technology. Within two weeks, the BOT managed to issue a total of $1.6 billion.
Benefits of the new platform
From what is known, the platform is using IBM Cloud’s highly secured blockchain technology to allow investors to benefit from fast bond issuance. The process that previously took more than two weeks to be completed can now be done in only two days, making it extremely efficient.
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On top of that, the cost and complexity of bond issuance are also reduced significantly.
The situation regarding the sale of the bonds is also quite different than what it used to be. Before, it was a multiparty, time-consuming, and overly-complex process. It relied on a system that did not operate in real-time, many of the validation steps were duplicated, and it used a manual reconciliation, which often suffered data errors.
All of this has been eliminated through the use of blockchain technology, which makes the platform completely immutable and capable of operating in real-time. It serves as the single source of truth for all network participants, it removes all the unnecessary validation steps, while the very cost of reconciliation is much lower than it used to be.
Not only that, but local investors can now buy bonds up to the maximum value of their allocated quota per person, and do it all from a single bank.
A major collaboration
As mentioned, the project required a partnership between BOT and IBM. However, that is not all — a total of eight institutions needed to team-up and collaborate to make it all happen. The institutions in question include BOT, Thailand Securities Depository, Public Debt Management Office, Thai Bond Market Association, as well as several selling-agent banks, such as Kasikorn Bank, Bangkok Bank, Siam Commercial Bank, and Krungthai Bank.
The next step is to use blockchain technology for every other government bond that is targeting wholesale investors and retailers alike.