BOT Issues $1.6bn in Government Savings Bonds on Blockchain

Leveraging IBM blockchain technology, Bank of Thailand’s platform reduces a process that previously took 15 days to two days.

BOT (Bank of Thailand) has issued USD 1.6B USD worth of bonds in two weeks after launching the world’s first blockchain-based platform for government savings bonds, following a strategic partnership with IBM.

In the past, the sale of government savings bonds in Thailand was a complex, multiparty, time-consuming process that relied on a non-real-time system, with duplicated validation steps and manual reconciliation prone to data errors.

Leveraging IBM blockchain technology on IBM Cloud, the new platform streamlines the processes of bond issuance for issuers, underwriters, registrars, investors and key ecosystem participants, enabling faster bond issuance and reducing operational complexity and the overall cost of issuing bonds.

The platform reduces a process that previously took 15 days to two days, IBM said in a statement at SIBOS 2020.

“The government savings bond platform now becomes an immutable, real-time single source of truth for network participants, which minimises the redundant validation and reduces the costs of reconciliation. In addition, Thai investors can now purchase bonds up to the maximum value of their individual allocated quota from a single bank.”

The effort to develop the new platform involved collaboration among eight institutions – BOT, the Public Debt Management Office, Thailand Securities Depository, the TBA (Thai Bond Market Association) and four selling-agent banks: Bangkok Bank, Krungthai Bank, Kasikorn Bank, and Siam Commercial Bank.

IBM Blockchain served as the technology and cloud platform partner.

BOT now plans to extend blockchain to all other government bonds targeting both retail and wholesale investors.

As of December 2019, Thailand’s bond market was worth USD 421 billion. Government bonds account for 37 percent of this total value.