Thai Central Bank Digital Currency to Enter Testing This Year, Bank of Thailand Says

The retail central bank digital currency (CBDC) will be used in conducting cash-like transactions within limited areas, among about 10,000 retail users.

Thai Central Bank Digital Currency to Enter Testing This Year, Bank of Thailand Says

Photo Credit: Unsplash/ Michael Fortsch

The BOT will assess benefits and risks from pilot project to formulate related policies

Highlights
  • The BOT is expected to test its retail digital currency soon
  • At present, the BOT has no plans to formally issue its retail CBDC
  • BOT will test retail digital currency as an alternative payment option

Thailand's central bank said on Friday it expected to test its retail digital currency from late this year to the middle of 2023, as an alternative payment option. During the testing, the retail central bank digital currency (CBDC) will be used in conducting cash-like transactions, like paying for goods and services, within limited areas and among about 10,000 retail users, the Bank of Thailand (BOT) said in a statement.

The BOT will assess the benefits and risks from the pilot project to formulate related policies and improve designs, it said.

At present, the BOT has no plans to formally issue its retail CBDC, it said.

A retail CBDC is a digital form of money issued by a central bank comparable to physical banknotes. It can be used in financial transactions both online and offline.

The BOT, however, has said it does not support use of digital assets, such as bitcoin and ether, as payment for goods and services due to associated risks.

Earlier this week, it was reported that a Chinese municipal bank issued the first e-CNY loan to a manufacturing unit as part of the country's digital yuan expansion. The People's Bank of China, which presently has 15 provinces with e-CNY testing centres, stated recently that it wished to increase this number.

The Agricultural Commerce Financial institution of Zhangjiagang, situated in China's Suzhou province in the Southeast portion of the country, has issued a 500,000 digital yuan (e-CNY) mortgage worth around Rs. 58.7 lakh, with intellectual property backing it as collateral.

As of May 31, the central financial institution recorded 264 million e-CNY transactions totaling CNY 83 billion ($12.29 billion or roughly Rs. 97,505 crore) since inception. Over 4.567 million service provider terminals throughout China settle for e-CNY as fee.


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