These efforts should pave way for faster and cheaper transaction and validation due to less intermediation process needed compared to the current systems. So far, I have discussed the Bank of Thailand’s role as a catalyst for digital infrastructure development and as a facilitator of innovation. One should not forget that our core mandate is being a regulator to safeguard financial stability. To this end, we proposed the new Payment Systems Act which became effective earlier this April. The Act unifies previously fragmented payment laws and regulations under a single Act, and empowers the Bank of Thailand with the authority to both regulate and oversee development of Thai payment systems in a manner conducive to new 8/10  payment innovations. Beside the Payment Systems Act, supervisory practices are also being updated to improve and safeguard cyber security risks. The updated guidelines on management of information technology risks of financial institutions were released in December last year to ensure that banks have appropriate governance structure in place and can swiftly respond in the event of cyberattacks. Our efforts also extend to ensuring safety of the payment system, and awareness among both financial service providers and consumers. Let me now turn to another area that is important for our region, which is the promotion of regional financial connectivity. Over the years, the Bank of Thailand has made multiple arrangements with regional central banks to support the use of local and regional currencies in trade and investment.

This could bring down the number of fraudulent transactions, and markedly reduce the merchant discount fees for credit card payments. The second one is the blockchain technology which we are working closely with the financial industry to apply them to various banking applications. ‘Thailand Blockchain Community Initiative’ was officially announced at the Bangkok FinTech Fair in March of this year. This initiative is a collaboration between 14 Thai banks and 7 leading businesses and state-owned enterprises to utilize blockchain technology in financial services, starting with a pilot project to offer blockchain-based letters of guarantee. This project is expected to become operational in the second half of this year. On a longer horizon, the blockchain technology is also planned to be applied to supply chain finance to improve authentication efficiency which would facilitate real sector activities. Other blockchain related projects in the pipeline include scriptless bond issuance which would significantly speed up saving bond allocation to retail investors from 15 days to 2 days, as well as granting more flexibility for bond issuers. The proof-of-concept of this project is almost complete, and production is expected to begin in the very near future. Another project in the pipeline is the “Project Inthanon” in which the Bank of Thailand and banks will co-develop a new way of conducting interbank settlement using wholesale central bank digital currency or CBDCs. Like other central banks, our goal is not to immediately bring CBDC into use, but rather to explore its potential and implications for back office operations.