The initiative, dubbed 'Project Inthanon, was revealed in a speech given by Central Bank governor Veerathai Santiprabhob at an industry event in Singapore.

"Like other central banks, our goal is not to immediately bring CBDC into use, but rather to explore its potential and implications for back office operations," says Santiprabhob. "These efforts should pave way for faster and cheaper transaction and validation due to less intermediation process needed compared to the current systems."

The issue of a a limited central bank digital instrument that serves as a settlement asset for payment and settlement activity is generally viewed as a promising application for the introduction of blockchain technology in the wholesale markets.

The Thai Central bank's efforts are part of a wider programme of private and public sector applications currently underway in the country. Fourteen of the country's banks operating in conjunction with seven leading businesses and state-owned enterprises are expected to introduce a production-ready project to offer blockchain-based letters of guarantee in the second half of the year.

Other blockchain related projects in the pipeline include scriptless bond issuance which would significantly speed up saving bond allocation to retail investors from 15 days to two days, as well as granting more flexibility for bond issuers.

"The proof-of-concept of this project is almost complete, and production is expected to begin in the very near future," says Santiprabhob.

Meanwhile, in South Africa, the nation's central bank has released details of 'Project
Khokha', a proof of concept designed to simulate a ‘real-world’ trial of a distributed ledger technology (DLT)-based wholesale payment system.

The results show that the typical daily volume of the South African payments system could be processed in less than two hours with full confidentiality of transactions and settlement finality. Transactions were processed within two seconds, across a network of geographically distributed nodes, with distributed consensus providing the requisite resilience. The SARB was able to view the detail of all the transactions to allow for regulatory oversight.

The project was built on Quorum, using Istanbul Byzantine Fault Tolerance (IBFT), Pedersen commitments and range proofs to deliver on the combination of scalability, resilience, confidentiality and finality.

Despite the positives, the report notes that "there are many issues to consider before the decision to take a DLT-based system into production can be taken. Some of these issues relate to the practicalities of implementation, but also to legal and regulatory factors and to the broader economic impact. "