In addition to its wholesale central bank digital currency (CBDC) projects and retail CBDC proofs of concept with businesses, the Bank of Thailand (BOT) will expand the scope of CBDC development targeting the retail public to a pilot phase. A possible real application of “retail CBDC” will be carried out within the private sector on a limited scale.
As the announcement of August 5 on the official page of the BOT says:
“The BOT will assess the benefits and associated risks of the pilot to formulate related policies and improve the design of the CBDC in the future.”
The pilot project is divided into two phases. In the first, “Foundation track”, CBDC will be tested in cash-like activities, i.e. payment for goods and services, in limited areas and at a scale of 10,000 retail users. Three companies will participate in the experiment: Ayudhya Bank, Siam Commercial Bank and 2C2P. The tests should start in late 2022 and last until mid-2023.
A second phase, called “Innovation track”, will focus on the presentation of innovative use cases for CBDC. The private and public sectors will have the opportunity to present their use cases for retail CBDC through a “CBDC Hackathon”, which will take place from August 5 to September 12, 2022. Selected participants will receive advice from experienced financial institutions.
Meanwhile, the BOT does not plan to issue a retail CBDC, “because the issue requires exhaustive consideration” of the risks and benefits for the financial system in general.
On August 4, Thailand’s financial regulator, the Securities and Exchange Commission (SEC), granted licenses to four digital asset traders, despite turmoil related to Singapore’s Zipmex exchange, which suspended fund withdrawals for country customers in July. Cryptocurrency volumes in Thailand soared nearly 600% in early 2021 as the bull market gathered momentum.
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