CBDC Central Bank Digital Currency, its coming !

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[ianguygil]

You can download papers from the Bank of Thailand on Project Inthanon which is the CBDC in Thailand being planned and associated efforts regionally. 

[lkn]

On 1/4/2023 at 9:57 PM, ianguygil said:

You can download papers from the Bank of Thailand on Project Inthanon which is the CBDC in Thailand being planned and associated efforts regionally. 

I glanced over the report, I could not find a clearly defined problem that they wish to solve, in fact, it explicitly says “We hope that the Report will provide a better understanding of the use of DLT applications […]”. Not sure if it is the current report, that should provide this better understanding.

 

It appears they have created a toy settlement system similar to BAHTNET, but based on “blockchain”, except blockchain is not actually good for this, so they introduced a notary service to work around probabilistic settlement, and some LSM oracle related to gridlocks.

 

So it is a distributed system with two centralized authorities, what great progress!

 

They do write about tokenizing all sorts of assets and then it could be possible to exchange these via the settlement system, but really, they could just do a BAHTNET 2.0 — for as long as I have been in Thailand, they have had instant interbank settlement via the latter.

Edited January 6, 2023 by lkn

[save the frogs]

so wherever central bank digital currency is rolled out, bitcoin will be banned?

 

[ianguygil]

The business case for Project Inthanon, initially, is for Real Time Gross Settlement between Banks. We are of course a part of this and I am a Board Advisor to R3 (BOT use CORDA for this) but I can not really get in to answering in detail as that would not be appropriate.

 

It is thought this will increase liquidity and remove single points of failure. Yes, Bahtnet is tried and proven but this is an obvious next step forward. Scalability needs are extreme because this needs to be almost instant. A

 

Please contact the BOT if you want more info. As I said I need to be careful answering things on projects which are not owned by the Bank. 

[ianguygil]

There is no clear link between a CBDC and the acceptance of BITCOIN in a market that I know of. 

The reasons for banning BITCOIN in a market would probably be concerns about either ill informed investors or the use of this kind of product by malignant players like Terrorists or Criminals who require anonymity 

[soi3eddie]

CBDC is scary for the levels of control and tracking it will give governments and central banks. After not long, it will surely be linked to a social credit score and climate score resulting in restriction of previous freedoms. This particularly in the west. In Thailand, will it work? What about all the corruption money if it replaces cash? Too easily traceable and the ledger record of every single transaction would be incriminating.

 

[lkn]

16 hours ago, soi3eddie said:

CBDC is scary for the levels of control and tracking it will give governments and central banks

CBDC does not exist and is not well defined, but if you look at some of the current push for it in the West, e.g. The ECASH Act, then it should actually give consumers (who are already using digital payment systems) more privacy than what they currently have.

 

Already our bank and VISA/MasterCard have our full transaction history, granted, at least in Europe there are strong privacy and data protection laws, but with a court order, the authorities would be able to access this. The only sensible “problem to be solved” I have seen about CBDC is to reduce the need for “private money” (i.e. consumer banks).

 

As for authoritarian regimes, those are already scary. E.g. in China you can be subjected to random inspections of your phone (to check for VPN software and similar), you are only allowed to exchange 40,000 CNY into foreign currency per year, there are cameras everywhere with face recognition, and most social media traffic is monitored and censored. You really think CBDC is changing anything significantly? Similar with Russia, where expressing dissent on Telegram can land you a multi-year prison sentice.

[lkn]

17 hours ago, ianguygil said:

Yes, Bahtnet is tried and proven but this is an obvious next step forward.

I know you wrote, that you couldn’t say a lot, but can you clarify what the “obvious next step forward” refers to?

 

Is it tokenization of arbitrary securities?

 

Because I don’t assume it is the ability for everyone and their mother to participate on equal terms in validating financial transactions and earn reward tokens (the essence of a blockchain), nor that all banks in Thailand are interested in sharing the same ledger (DLT).

 

And if it is neither of the above, it appears you are just creating BAHTNET V2.0, but threw in some buzzwords to make it sound sexy.

[ianguygil]

I don't have time to look back at what I have that is public or what is not. Without any firm information I would imagine that the technologies behind Project Inthanon could be used for the securitization of Thai Government assets. like bonds.

 

Other consumer oriented examples under discussion separate from the BOT work include some kind of tokenization of loyalty.

 

Tokenization of physical assets is taking place but is a minefield in many ways. It is worth noting that the vast majority of :"money" in the world is electronic (i.e. not in physical cash) but it relies on banks. As FTX has shown, keeping your Digital Assets (Tokens) in a less than well run place can be ... interesting. 

 

But what I can see right now is a focus on collaboration with other central banks to simplify FX (moving away from Correspondent accounts to some extent).

 

Good examples of the use of Distributed Ledger in regulated markets in action today are SIX in Switzerland plus DTCC in the USA. Both are real world customers of R3, and are using CORDA, something that I do know about and am at liberty to discuss because they are publicly announced. 

 

Here is a link to the R3 DTCC announcement 

 

That's as far as I am going on this discussion. 

 

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