The Bank of Thailand said it will begin testing its CBDC in a retail capacity later this year. It plans to test the currency for payments for goods and services, involving 10,000 retail users and three companies.
Thailand’s central bank announced on August 5 that it will begin testing its central bank digital currency (CBDC) later this year. The Bank of Thailand issued a press release saying the trial will run from sometime later this year to mid-2023 and that it “recognizes the importance of CBDCs as a new financial infrastructure.”
Therefore, the bank considers it necessary to expand the scope of the CBDC experiment to a pilot phase “in which the actual implementation of Retail CBDC will take place in cooperation with the private sector on a limited scale.” This is a significant step forward in terms of implementation and an indication that the country is keen to reap the benefits of the technology.
Will be two priorities for the pilot to focus on, which the bank calls the Foundation track and the Innovation track. The first focuses on the efficiency and security of the technology underpinning the CBDC. The activities that will fall under this category are payments for goods and services, with 10,000 retail users and three companies selected for this purpose.
The Innovation track focuses on programmability “which will facilitate the development of innovative use cases for CBDC, resulting in new financial services for a wide range of customers.” Both the private and public sectors will be able to participate in a hackathon, with selected participants and teams receiving mentoring.
Thailand is warming up to crypto
Thailand has been somewhat hesitant about its stance on cryptocurrencies. In April 2022, there were some discussions about new regulations leading to a stifled crypto market in the country. Increased regulatory activity has also led Thailand’s oldest bank to shelve its decision to buy a stock exchange.
Meanwhile, Thailand’s central bank has been in no rush to develop CBDC. The head of the bank said that there are several alternative payment options. Taxes on crypto transactions have also been delayed until 2024.
CBDC experiments are a key priority
In addition to regulation, CBDCs have become the most important topic among governments and regulators. Almost all major countries are now working on a CBDC, and many have already started piloting.
Countries are now well aware of the benefits that technology offers and want to leverage it for both domestic and international transactions. Most of these countries also seem fine with letting cryptocurrencies coexist with digital versions of national currencies.
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