The Bank of Thailand said that 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.
The central bank of Thailand announced on Aug. 5 that it would begin testing its central bank digital currency (CBDC) later this year. The Bank of Thailand published a press release saying that the test would take place from sometime later this year to the middle of 2023 and that it “recognizes the importance of CBDCs as a novel financial infrastructure.”
As such, the bank deems it necessary to extend the scope of the CBDC experiment to a pilot phase “in which real-life application of Retail CBDC will be conducted in cooperation with the private sector within a limited scale.” This is a significant move forward in terms of application and is a sign that the country is keen on leveraging the benefits of the technology.
There will be two priorities that the pilot will focus on, which the bank calls the Foundation track and Innovation track. The first focuses on the efficiency and safety of the technology supporting 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 the 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 mentorship.
Thailand warming up to crypto
Thailand has been somewhat vacillatory on its stance on crypto. In April 2022, there were some discussions about new regulations leading to a stifled crypto market in the country. Heightened regulatory activity has also led to Thailand’s oldest bank stalling in its decision to acquire an exchange.
Meanwhile, Thailand’s central bank has not been rushing to deploy the CBDC. The head of the bank said that there were enough alternative payment options. Taxes on crypto transactions have also been delayed to 2024.
CBDC experiments a main priority
Besides 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 begun executing pilot programs.
Countries are now well aware of the benefits the technology brings, and want to leverage it for both domestic and international transactions. Most of these countries also appear fine with letting crypto co-exist with digital versions of national currencies.
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