Project Inthanon-LionRock, a distributed ledger technology based proof-of-concept (PoC) prototype undertaken with ten participating banks from both places, was completed in December 2019.

Under the project, a THB-HKD cross-border corridor network was developed, allowing participating banks in Hong Kong and Thailand to conduct funds transfers and foreign exchange transactions on a peer-to-peer basis and in an atomic payment-versus-payment (PvP) manner.

The two central banks have issued a joint research paper, which picks apart relevant issues around token key conversion, instantaneous interbank funds transfers, individual currencies, foreign exchange execution and liquidity management.

Further joint research work is underway, including exploring business cases and connections to other platforms and involving the participation of banks and other relevant parties in cross-border funds transfer trials.

The results of the study come a day after six of the world's central banks agreed to team up to share research on digital currency issuance in their home jurisdictions. The Hong Kong and Thai central banks are not yet part of the coalition, although Mathee Supapongse, deputy governor of the BOT, says: "The design and key findings of the project have added new dimensions to central bank communities’ studies on cross-border funds transfer area.”

Edmond Lau, senior executive director of the HKMA, adds: “Our joint research project with the Bank of Thailand marks an important first step to solve the pain points of low efficiency and high costs in traditional cross-border payments. With the use of blockchain technology, the innovative and unique solution not only addresses different technical issues in practical applications but also offers good references to the central banking community on the use of Central Bank Digital Currency.”