After weighing its options and determining the possible outcomes, the central bank of Thailand has come out with guidelines it will use in developing and then testing a retail digital currency that it is proposing to issue. Revealing its plans, the regulator announced that it will begin trials in the first half of the year 2022.
Central Bank of Thailand to begin CBDC in 2022
Bank of Thailand (BOT) has said that it hopes to start testing a central bank digital currency (CBDC) in the second quarter of the year 2022. According to what a high-ranking official told Bangkok media, he said the retail currency will be used by the entire public, as an alternative payment option.
According to reports from Reuters, Assistant Governor Vachira Arromdee explained that the CBDC will not affect the monetary policy or even the supply of money in the financial system of the country in any way. The Bank of Thailand BOT also expects the demand for its digital currency to increase greatly in the coming years as he believes the CBDC will substitute paper cash and current e-money.
Arromdee’s assurance of the future of CBDC in Thailand is not unrelated to the results from a study/data survey on the implications of a retail CBDC on Thailand’s financial sector which they presented. The study report paper was titled “The Way Forward for Retail Central Bank Digital Currency in Thailand” and was published back in April.
Thai digital currency will be similar to cash
From the research, it was concluded that the CBDC must be similar to cash and bear no interests. It also has to be circulated to the general public by financial institutions and its conversion should be either limited or conditional. This is directly aimed at ensuring that the state-issued coin would not be in competition with regular deposits and that the role of intermediaries will be preserved.
Bank of Thailand to test Retail Digital CurrencyIn the polls carried out during the course of the research, respondents urged BOT to educate consumers and improve their knowledge and understanding of the benefits, emphasizing the differences the digital currency has with present-day electronic payment options.
It was these feedbacks and findings that have been taken into account when determining the guidelines for the development and real-life pilot of the CBDC, Bank of Thailand confirmed.