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The Bank of Thailand (BoT) has joined hands with German technology firm Giesecke+Devrient (G+D) for the creation of a central bank-issued digital currency (CBDC). A report unveiled this news earlier today noting, that the central bank had procured G+D’s services after issuing the company a letter of invitation. Reportedly, BoT has set aside $320,000 (£226,568.00) for this project.
According to the report, the aforementioned amount should cover taxes, transportation, and registration fees, among other expenses. Through this move, the central bank has inched closer towards its mission of issuing a CBDC in the next three to five years. While BoT did not disclose why it partnered with G+D for the development of its Proof-of-Concept (PoC) CBDC, it is probably because the company has been in the CBDC-development space for quite a while.
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This news comes after BoT teamed up with ConsenSys, Siam Cement Group, and its subsidiary Digital Ventures (DV) in 2020 to roll out a retail CBDC. In April this year, BoT’s assistant governor, Vachira Arromdee, announced that the bank had started accepting public feedback on its retail CBDC until June 15.
On top of both fiats and CBDCs
G+D leverages its Filia solution to help simplify the launch of CBDCs. According to the company, Filia offers users privacy and meets the required compliance requirements of the central bank. As such, the solution kills two birds with the same stone, seeing as it offers the privacy of cryptocurrencies while helping central banks thwart money laundering or tax evasion. Apart from this, Filia also gives central banks an option to choose between using a centralized database or the blockchain for their CBDCs.
While G+D has made a name for itself in the CBDC space, its primary business is assisting central banks to manage banknotes. Reportedly, this business unit accounted for 45% of the company’s $2.80 billion (£1.98 billion) revenue in the past year. The company also has its toes dipped in mobile security, digital identity, and infrastructure security. Combined with CBDC expertise, these features easily attract central banks to work with the firm.
While Thailand occupies the 25th spot, regarding GBP, its CBDC research is quite significant. At the moment, a host of leading nations, including the US, don’t have solid CBDC plans. Apart from Thailand, only a handful of other countries in the world are testing CBDCs, with China and Sweden achieving significant milestones.