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Digital Currency in Thailand
Bank of Thailand plans to hold a Central Bank Digital Currency Pilot Test
Bank of Thailand plans to hold a Central Bank Digital Currency Pilot Test
31/03/2022
In 2022 The Bank of Thailand (BOT) is planning to take the next step in its development of a retail Central Bank Digital Currency (CBDC) by holding a pilot phase to test its feasibility. This pilot scheme is expected to happen by the end of the year.
This pilot phase will allow the BOT and the relevant bodies to assess how the required technology would work within its financial system, as well as try to identify any potential issues that could occur.
Points clés
- Thailand is planning to hold a pilot scheme for a Central Bank Digital Currency (CBDC).
- There are no plans for the formal release of a full CBDC in Thailand by the BOT yet.
- The pilot scheme will allow for the use of the CBDC in several pre-selected areas and approximately 10,000 retail stores.
- The private sector and public will be invited to share ideas for the use and adoption of the CBDC as part of the pilot.
What is a CBDC? Is it a digital currency?
A retail CBDC is a form of digital currency. Holding a CBDC is equivalent to holding banknotes or real currency. One of the benefits of CBDCs is that they are effectively risk-free.
According to the International Monetary Fund, approximately 100 countries, including China and Cambodia are currently exploring the use of CBDCs.
How will the pilot scheme work?
As part of the pilot scheme, there will be 2 phases.
The first phase involves the retail CBDC being used in cash-like activities such as paying for goods and services.
During this phase, the CBDC will be available for use in limited areas and in about 10,000 retail businesses. The areas in which the CBDC will be used have been selected by the BOT, along with Bank of Ayudhya (Krungsi), Siam Commercial Bank (SCB) and 2C2P (Thailand).
This first phase of testing is expected to commence by the end of 2022 and will last until mid-2023.
The second phase of the pilot scheme will be the “Innovation Track”. This phase will be used to focus on programmability and how to facilitate the development of the CBDC. This phase is expected to result in new financial services being created for a wide range of customers and to help the BOT develop and improve the design of CBDC to suit Thailand.
Additionally, as part of the 2nd phase, the BOT will allow the private sector and the public to present business use cases for the retail CBDC. These presentations will be shared as part of what will be known as the “CBDC Hackathon”.
Applications for those who wish to participate in the Hackathon will be available from the 5 August – 12 September 2022.
What does the BOT hope to achieve from the pilot scheme?
Currently, the BOT doesn’t have plans to issue a retail CBDC in Thailand, but will use this pilot as a way to explore the benefits and associated risks that implementation may have for the financial system in Thailand.
The pilot program will form a study to assess the suitability of technology and design, and will be conducted under a limited scale with selected participants.
En conclusion
It is fair to say that Thailand has embraced the adoption of Digital Currency & Digital Assets and ranks among the top 10 nations of Digital Asset holders. The exploration of a CBDC by the BOT makes sense as the next step for Digital Assets in Thailand.
The release of a CBDC offers opportunities for the Government and business alike. For more information about Digital Assets in Thailand, why not prendre rendez-vous avec l'un de nos experts.
For a full list of our Blockchain services, please see here.
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Questions fréquemment posées
What is a CBDC?
A retail CBDC is a form of digital currency. Holding a CBDC is equivalent to holding banknotes or real currency. One of the benefits of CBDCs is that they are effectively risk-free.According to the International Monetary Fund, approximately 100 countries, including China and Cambodia are currently exploring the use of CBDCs.
How does a CBDC work?
As part of the pilot scheme, there will be 2 phases.
The first phase involves the retail CBDC being used in cash-like activities such as paying for goods and services.
During this phase, the CBDC will be available for use in limited areas and in about 10,000 retail businesses. The areas in which the CBDC will be used have been selected by the BOT, along with Bank of Ayudhya (Krungsi), Siam Commercial Bank (SCB) and 2C2P (Thailand).
This first phase of testing is expected to commence by the end of 2022 and will last until mid-2023.
The second phase of the pilot scheme will be the “Innovation Track”. This phase will be used to focus on programmability and how to facilitate the development of the CBDC. This phase is expected to result in new financial services being created for a wide range of customers and to help the BOT develop and improve the design of CBDC to suit Thailand.
Additionally, as part of the 2nd phase, the BOT will allow the private sector and the public to present business use cases for the retail CBDC. These presentations will be shared as part of what will be known as the “CBDC Hackathon”.
Applications for those who wish to participate in the Hackathon will be available from the 5 August – 12 September 2022.
What are the different types of CBDC?
There is 2 type of CBDC, Wholesale CBDC and General Purposes CBDC.
What is the difference between Stablecoin, CBDC, Cryptocurrency?
Cryptocurrency: It is a digital assets for medium of exchange whose ownership is recorded in distributed ledger in the blockchain
Stablecoin: Cryptocurrency whose value refers to external assets.
CBDC: Digital currency or money that is directly issued by a central bank of Thailand
What countries are leading the CBDC race?
For now China and Sweden are in the pilot project stage. Singapore has completed the research stage and soon Thailand
Does a CBDC need a Blockchain?
No it does not, the approach should be technologically agnostic, but if created properly, and the infrastructure supports it, the use of blockchain can provide many benefits.
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