Bank of Thailand to Test Retail Digital Currency – Bitcoin News


Bank of Thailand to Test Retail Digital Currency

After studying possible implications, the central bank of Thailand has prepared guidelines for the development and testing of a retail digital currency that it wants to issue. The regulator announced it’s planning to begin trials in the first half of next year.

Central Bank of Thailand to Pilot CBDC in 2022

Bank of Thailand (BOT) intends to start testing a central bank digital currency (CBDC) in the second quarter of next year. The retail currency will be implemented as an alternative payment option for the public, a high-ranking official told media in Bangkok.

The CBDC will not affect the country’s monetary policy or the money supply in its financial system, said Assistant Governor Vachira Arromdee, quoted by Reuters. The BOT expects increasing demand for its digital currency in the future and believes it will partially substitute paper cash and current electronic money.

Arromdee presented results from a study on the implications of a retail CBDC on Thailand’s financial sector and data from a survey. Both have been conducted for a paper titled “The Way Forward for Retail Central Bank Digital Currency in Thailand” which was published in April.

Thai Digital Currency to Be Similar to Cash

According to the research, the CBDC must be similar to cash and bear no interest. It has to be distributed by financial institutions to the general public and its conversion should be conditional or limited. The aim is to make sure the state-issued coin does not compete with regular deposits or cause bank runs while preserving the role of intermediaries.

Polled respondents agreed this will allow mitigating the potential negative effects of introducing a central bank digital currency. They also urged BOT to promote consumer knowledge and improve understanding of the benefits, placing an emphasis on the differences with present-day electronic payment options.

Bank of Thailand to Test Retail Digital Currency

The feedback and the findings have been taken into account when determining the guidelines for the development and real-life pilot of the CBDC, Bank of Thailand noted. The regulator now plans to focus on conducting cash-like transactions on a limited scale, such as payments and conversions as part of a testing phase scheduled to begin in Q2, 2022.

The Thai central bank has also set the goal of exploring ways to further develop its digital currency and find new use cases. To achieve that, it will rely on the participation of the private sector and help from tech developers. The bank stressed results from the trials will be assessed to ensure the retail CBDC is beneficial to all parties and does not undermine the economic and financial stability of the country.

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bank of thailand, Bot, CBDC, Central Bank, Development, Digital Currency, guidelines, paper, pilot, pilot project, retail, study, Survey, Testing, tests, thai, thailand, trials

What are your expectations about the future of Thailand’s retail digital currency? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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