Thailand and Hong Kong are working together on a cross-border crypto project
Central banks are increasingly seeking more efficient payment methods – and crypto tokens fulfill that role. Now, Thailand and Hong Kong have just announced a joint agreement on the use of digital currencies, in order to allow faster payment in bilateral trade.
Central banks recognize that their options for cross-border payments are becoming poorly outdated, painfully slow and ridiculously expensive. Yes, we speak of SWIFT.
The explosive growth of the crypto industry, which is only a few years old, has shown how easy, fast and cheap it can be to send money across borders. In particular, Asian countries are now turning to cryptocurrencies to facilitate international transactions. Thailand and Hong Kong are the youngest to integrate virgin technology.
According to reports, the two nations have agreed to introduce a two-tier digital token to test cross-border credit transfers. The initiative is named “Project LionRock-Inthanon”. The first stage involves issuing a crypto token to the participating banks.
According to the Hong Kong Monetary Authority (HKMA), the second stage is to distribute the crypto-token to bank customers for the processing of wholesale payments. The fintech cooperation between the HKMA and the Bank of Thailand has been running since May.
The two countries are estimated to have bilateral trade 16 $ bn a year, and the new one System will give companies a competitive advantage over excessive exchange rate mechanisms between the two currencies.
The LionRock project focuses on optimizing cross-border credit transfers and payments between banks and corporations – rather than replacing cash, as the People's Bank of China intends to do with its crypto-yuan. HKMA Senior Executive Director Edmond Lau:
According to him, the HKMA and the “Bank of Thailand” in the first quarter announce. The Thai central bank has already audited its own digital currency of the Central Bank (CBDC) as part of “Project Inthanon”. The initiative involves banks such as HSBC, Standard Chartered and a number of Thai banks, including Kasikorn Bank and Krungthai Bank.
The Kingdom has just opened its doors to cryptocurrencies by adopting favorable rules for the crypto industry.
Ripple is not used
The system seems to be similar to San Francisco-based fintech company Ripple. The company's loyal followers, also known as the “XRP Army,” insist that banks use their tokens.
The latest announcement proves that they tend to develop their own rather than relying on one controlled by a third party.
Text Proof: newsbtc
Last update: Thursday, December 5 2019