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Thailand: Ministry of Finance To Tokenize Over $6.4mn Worth Of Bonds

July 13, 2020
Ross Peili


Thailand: Ministry of Finance To Tokenize Over $6.4mn Worth Of Bonds

The Public Debt Management Office (PDMO) of Thailand revealed its plan to digitalize a sale of over $6,4mn worth of bonds (200 million Thai baht), in an announcement published at Thailand’s Ministry Of Finance web portal.

The document indicates we’re talking about tokenizing savings bonds which will be later sold through the government-backed blockchain wallet developed by Krung Thai Bank.

The reasoning behind the decision, aside from faster transaction times, increased security, and lower settlement costs would be the fact we’re subjecting bonds with extremely low value, hence blockchain seems like an ideal solution for selling individual assets that in some cases are worth not more than $0,03 apiece.

Read More: Hong Kong and Thailand Launching Blockchain-Based Settlement Network

Of course, Thailand is not a newcomer when it comes to distributed ledger technologies as it had previously developed and successfully tested various financial services on blockchain in association with Hong Kong’s financial regulators. 

What’s even more interesting, is the fact Thailand is not after a national digital currency as observed in China, the EU, and the US, but rather after ready-to-go use-cases that would allow the growing South-Asian country to compete with international monetary giants in terms of efficiency, transaction speeds, as well as enable better fee structures.

According to domestic media outlet Bangkok Post, Thailand’s Ministry of Finance said managing the savings bonds using blockchain wallets is a giant leap towards the true digital economy, while it is an overall efficiency booster for the Thai government. 

“With the blockchain system, PDMO can break up the amount of the savings bond face value to as low as 1 baht from the regular 1,000 baht,” Patricia Mongkhonvanit, General Director at PDMO said to the Bangkok Post. 

In addition, storing and distributing the bonds in this case, and potentially other financial assets on-chain helps to reduce the face value of the respective asset, having in mind outdated financial information registry protocols are costly and extremely time-consuming.

Furthermore, old registry systems relying solely on paper are subject to type errors and mistakes, while at the same time they are easy to forge and/or tamper with. 

Read More: PBoC Issues Special Financial Bonds for SME Loans Over Its Native Blockchain

Last but not least, besides selling the 200 million baht bonds pack, the Thai Ministry of Finance said that although this is a pilot use-case, Thai citizens shall be able to participate in government-issued bonds, securities, and even IPOs, directly through their hand-held device. 

PDMO believes that some bonds will carry an annual interest rate of 1,7% making them catalysts for subscribers who seek to invest in government affairs and financial activity.  

You think Thailand is over its game, or that’s something you’d expect from South Chinese economies? Let me know your thoughts in the comments section below or feel free to bother me on Twitter.