Total of 22 Thai banks and foreign-bank branches have joined hands to build a full network of electronic Letter of Guarantee (e-LG) on blockchain via BCI (Thailand) Co., Ltd. with support of the Bank of Thailand (BOT). The first of its kind in the world, these 22 banks collaboratively adopt the common blockchain system.
This effort aims to the 50 percent increase in the use of blockchain-based e-LG by Thai businesses within three years, which will help slash their operating costs as they can use the service provided by any participating bank on this common platform.
The initiative is expected to bolster competitiveness for both businesses and the nation, as a whole.
Dr. Veerathai Santiprabhob, Bank of Thailand Governor, said that this cooperation under Thailand Blockchain Community Initiative entails a tangible progress, in particular, being able to effectively embrace the blockchain technology in financial and business sectors. Starting with 14 commercial banks together with state enterprises and large companies,.
There are currently 22 participating banks with the accomplishment of establishing BCI (Thailand) Co., Ltd. to provide the blockchain-based e-LG as its first service. The collaboration marks an outstanding milestone in expanding the blockchain community in Thailand to accommodate myriads of services in the future.
This will also elevate the country’s competiveness capability through the use of shared infrastructure and blockchain technology, thus being a boon to the overall Thai economy.
This initiative will not only be beneficial to Thai financial sector but also businesses as well as government sectors. The newly-established BCI (Thailand) Co., Ltd. is expected to be an instrumental driver to enhance the blockchain collaboration for a broader coverage of services and stakeholders.
Mr. Predee Daochai, Chairman of Thai Bankers' Association and Chairman of the Board of Directors of BCI (Thailand) Co., Ltd., said that blockchain technology has become widely accepted and increasingly adopted worldwide. Thailand has also begun applying the blockchain technology in business operations to enhance convenience and security, resulting in significant reduction of paperworks.
To strengthen the collaboration under Thailand Blockchain Community Initiative, BCI (Thailand) Co., Ltd. is formed to focus on researching and developing technologies and innovations to provide innovative services under the sound supervision. Being able to connect all participating banks on the common platform, the system can be further implemented as part of the national infrastructure.
This will promote the adoption of new technology in all business segments, as well as enhancing the efficiency and competitiveness capability of Thai business sector and economy for sustainable growth.
e-LG on blockchain is the first service launched by BCI (Thailand) Co., Ltd. enabling small and large companies to practically and affordably access the digitalized services.
This will help reduce costs associated with document and data management under the world-class security standard. With the front-to-end implementation of blockchain based on cloud technology, this service offers greater flexibility, security and accountability.
It also helps eliminating forgery of LG documents, providing efficient service delivery and verifying transactions around the clock. Therefore, the relevant processes are significantly shortened. The e-LG on blockchain is expected to go live in June 2019 under the BOT’s regulatory sandbox, to introduce additional beneficiaries in the third quarter of 2019 and to provide other blockchain-based services in the future.
Within the next 3 years, it is targeting to increase the adoption of this blockchain-based e-LG to 50 percent of all LGs issued in Thailand. At present, more than 500,000 LGs, worth over 1.3 trillion Baht, are issued annually by both public and private financial institutions.
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BCI (Thailand) Co., Ltd. is formed by an initial capital from 6 Thai commercial banks, namely, Bangkok Bank, Krungthai Bank, Bank of Ayudhya, KASIKORNBANK, TMB Bank and Siam Commercial Bank.
The company will provide the service together with the other 16 participating banks, namely, Kiatnakin Bank, Citibank, CIMB Thai, Sumitomo Mitsui Banking Corporation, TISCO Bank, Thanachart Bank, BNP Paribas, Bank for Agriculture and Agricultural Cooperatives, Export-Import Bank of Thailand, Mizuho Bank, United Overseas Bank (Thai), Land and Houses Bank, Standard Chartered Bank (Thai), Government Savings Bank, Industrial and Commercial Bank of China (Thai) and the Hongkong and Shanghai Banking Corporation.
In addition, 9 state enterprises and large corporates are beneficiaries, namely, Metropolitan Electricity Authority, Electricity Generating Authority of Thailand, Provincial Electricity Authority, Thai Oil, PTT, SCG, PTT Global Chemical, GC Marketing Solutions and IRPC. The BCI (Thailand) Co., Ltd. also receives support from six partners in terms of technology capacity including the recommendations and legal advices on the company establishment. The six partners include Accenture Solutions Co., Ltd., Baker & McKenzie Ltd., Processing Center Company Limited, IBM Thailand Co., Ltd., TBN Software Company Limited and KASIKORN Business-Technology Group.