The Bank of Thailand (BOT) plans to launch a digital currency pilot project by the end of 2022.
BOT officials announced plans to launch a retail central bank digital currency (CBDC) pilot project in late 2022. The project will last until mid-2023. It will involve three financial companies, namely Bank of Ayudhya, Siam Commercial Bank and 2C2P, as well as up to 10,000 retail users. This part of the project is referred to as the Foundation track.
In addition, there will be the Innovation track, during which the innovative options for using CBDCs are planned to be explored. Everyone will be able to present their options for using retail CBDCs during the CBDC Hackathon, which will be held from August 5 to September 12, 2022. Major financial institutions will lead the most promising ideas.
The BOT emphasizes that full-fledged retail CBDC issuance is not considered at this time, as it requires a thorough study of the possible risks and potential benefits of such a solution for the state’s financial system. The pilot project is being launched in order to assess the possible effects of the CBDC launch on the Thai economy and be able to improve the design of digital currency in general.
Currently, the BOT is developing a joint project with the Hong Kong Monetary Authority (HKMA) for a wholesale CBDC for cross-border transactions called Inthanon-LionRock2 (ILR2).
Besides, a recent study by Statista showed that Thailand has the highest percentage of NFT holders. This indicates a strong level of cryptocurrency market development, although the Securities and Exchange Commission said cryptocurrency poses a threat to Thailand’s financial system. However, a well-designed CBDC in this context may enhance the stability of the country’s financial sector, as recently reported by analysts at the U.S. Department of Treasury.
