July 24, 2024
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Thailand’s Central Bank to Start Testing Digital Currencies

Thailand's Central Bank to Start Testing Digital Currencies

The Central Bank of Thailand will commence trialing CBDC (Central Bank Digital Currency) in the second quarter of next year. The central bank has already issued a 59-page paper titled, ‘The Way Forward for Retail Central Bank Digital Currency in Thailand.’ It is receiving public feedback on it till June 15. As per the Bank of Thailand’s report, the central bank will start its CBDC developmental efforts by engaging with stakeholders, accompanied by cost-benefit analysis to discover opportunities, risks, and challenges linked with a sovereign digital currency.

Chatting during the Friday briefing, the assistant governor of the financial markets operations group at the BoT, Vachira Arromdee, opined that the central bank regards CBDCs as a method of offering more comprehensive access to financial services in the country. Arromdee further contends that the bank can implement the digital baht in the next three to five years. Members have till June to present their judgments on the Bank of Thailand’s plans for a CBDC. Moreover, the Thai regulator specifies CBDC as a digital form of money equivalent to the existing physical banknotes, which one can employ for online and offline transactions. 

Regional CBDCs Become a Significant Trend in Sovereign Digital Currency

As reported earlier, the Bank of Thailand is also part of a CBDC alliance involving China, Hong Kong, and the United Arab Emirates. Admittedly, regional CBDCs are becoming a prominent trend in the emerging sovereign digital currency ecosystem as participants look toward cross-border interoperability. Moreover, recently, the Eastern Caribbean Central Bank has launched a regional CBDC for four of the eight Eastern Caribbean Currency Union countries.

Furthermore, the Bank of Thailand is also working on wholesale digital currency via Project Inthanon, which concentrates only on interbank payments. The project has been going on since 2018 and is still in a proof-of-concept stage. The bank has yet to explore the project’s operational, technical, regulatory, and legal considerations of wholesale CBDC. Meanwhile, the Bank of Thailand has extended its concentration to a retail CBDC for the general public, expecting digital currencies to perform a prominent role in Thailand’s future financial landscape. 

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