According to the South China Morning Post, Hong Kong, and Thai Central banks are exploring blockchain-backed digital currencies to facilitate quicker payment in bilateral trade. Both the Monetary authorities are poised to roll out a two-tier digital token as part of the process for creating a prototype for cross-border fund transfers between the countries.
Banks will distribute tokens to their corporate customers.
According to the report, the first tier of the prototype, project lionRock-Inthanon, involves the issuance of a token, and the second tier includes the banks distributing the tokens to their corporate customers for settling wholesale payments with other banks, or with other companies.
The digital token is expected to fasten the currency settlement between the countries.
In 2018 the bilateral trade between Hong Kong and Thailand was US$19.6 billion. The use of the digital token is expected to speed up the currency settlement between the two countries. Bank of Thailand has also been researching its own central bank digital currency, which involves banks such as HSBC, Standard Chartered, and other banks in the countries.
