- The central bank of Thailand has issued $1.6 billion in government bonds on IBM blockchain.
- This is the first-ever blockchain-based platform for governmental bonds issued by Thailand.
- The platform is being considered as a solution to the high complexity and costs in terms of bond issuance.
In an official statement by IBM on Monday, it was announced that the Central Bank of Thailand has issued $1.6 billion in government bonds on IBM blockchain.
Before the release, the sales involving government bonds used to rely on a non-real-time system that caused the entire procedure to behave erroneously. But, within a week of the platform release, the usual time investment for the bond issuance has been reduced from 15 days to 2 hours.
In precise terms, it is being looked at as a solution with low complexity and high cost-effectiveness in terms of bond issuance. It is also expected to streamline the process involving bond issuance with minimal reconciliation and cost investments. However, as of now, the advantages and business values of using this blockchain tech for government bonds are shared amongst the stakeholders, investors, issuers, underwriters, and registers only.
Apart from the discussion on technicalities and financial aspects of bonds, IBM’s official release also mentioned the organizations that have been a part of the journey in creating a strong governmental infrastructure.
“The effort to develop a secure and efficient government bond infrastructure involved collaboration among eight institutions including BOT, Public Debt Management Office, Thailand Securities Depository Co., Ltd, Thai Bond Market Association and selling-agent banks, including Bangkok Bank, Krungthai Bank, Kasikorn Bank, and Siam Commercial Bank, with IBM Blockchain as technology and cloud platform partner.”
Overall, the platform is being implemented as a resort to the lack of transparency and high operational costs. And, the Bank of Thailand has now planned to extend this platform to other government bonds aimed at the wholesale and retail investors.
There is no doubt in the fact that leveraging something such as blockchain technology on the IBM cloud would be a highly secure and efficient step towards the bond implementation.
What do you think? Will the blockchain tech out rule the traditional practices of bond issuance?
Let me know your views on the comments! Until then, keep reading 🙂