Thailand Is Planning a ‘Bond Coin’ for Faster Securities Settlement

Wolfie Zhao
Jul 16, 2018 at 06:00 UTC
Updated Jul 16, 2018 at 07:33 UTC
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A self-regulatory organization in Thailand is planning to create a custom token aimed to speed up corporate bond settlement in the country.

The Thailand Bond Market Association (TBMA) said it has received the green light from Thailand’s Securities and Exchange Commission to develop a private blockchain that will be only accessible for parties in the bond market, such as registered issuers, investors and depository organizations.

According to a news report from Bangkok Post on Monday, the TBMA said the development process will be divided into three stages and will start next month. The orgnization further explained it will first create a blockchain-based platform for listing and sharing bond information, such as interest rates in a distributed manner.

During the second phase, the platform will add in new features to enable bond deposits, which is estimated to take nine months for completion, the report said. The TBMA indicated it will eventually develop what it calls a “bond coin” on top of the blockchain platform in the next 12 months to tokenize assets for speedier clearing and settlement.

Chaitat Prachuabdee, executive vice president of the TBMA, said the new infrastructure is expected to improve the transparency of corporate bond information and could potentially shorten the transaction time from the current 7–10 days to just 1–3 days.

The effort follows news that Thailand’s national stock exchange has built a blockchain platform it hopes will widen access to capital funds for domestic startups and enhance the efficiency of Thailand’s equity market.

Blockchain is increasingly being eyed and adopted in the securities markets as a solution for improving settlement systems.

As previously reported by CoinDesk, Switzerland’s primary stock exchange also released a plan for building a digital asset exchange in order to tokenize and transact traditional securities.

Meanwhile, a group of industry stakeholders including Nasdaq has developed a blockchain platform to transfer collateral to central counterparties when trading securities.

Perhaps most notably, though, the Australian Securities Exchange (ASX) is planning to replace its CHESS clearing and settlement system with a distributed ledger-based alternative in 2020.

Market index image via Shutterstock