The Bank of Thailand is looking at the use of DeFi in its digital bathtu

Thailand's central bank is analyzing smart contracts and the implementation of decentralized finance (DeFi) for its national digital currency, the digital baht.

Vijak Sethaput, senior programmer of the Central Bank of Thailand (BoT) for the digital currency project - Inthanon, discussed the progress of the country's CBDC in an interview on August 13 at the Official Forum of Monetary and Financial Institutions.

Sethaput has been joined by Sky Guo, CEO of New York-based blockchain company Cyprusherium, which focuses on global deployments and CBDC interoperability.

In an interview, Guo said global jurisdictions could use the DeFi model to allow skilled parties to issue digital assets backed by real assets such as real estate and stocks and use them as collateral for CBDC loans. According to management, such developments could bring the economy enormous liquidity.

Sethaput said the central bank was following the latest developments in the DeFi industry, however, before trying to adopt the new technology into its native Thai cryptocurrency, it has to address two major DeFi issues - customer identification and privacy.

In an interview, Sethaput stated that the implementation of smart contracts is a key element of the next phase of the Inthanon project:

"We examined the functionality of smart contracts as described by Sky. We mimic the life cycle of a bond, so the bond itself can pay coupons and can be traded between the parties, we have something called a redemption so it can be sold and then it can be recovered at another time." and also when trading. "

BoT comments come amid the growing hype around the DeFi industry. DeFi is a new tool that aims to enable cryptocurrency entrepreneurs to recreate traditional financial instruments in a decentralized architecture, beyond the control of companies and governments. The DeFi industry breaks records in 2020, and companies around the world are increasingly putting money into the crypto sector.