The central bank of Thailand is not going to rush with the launch of its digital currency as it’s not yet sure about the benefits it would bring. The development of the coin state-issued may take many years, according to the head the monetary authority.
Thailand’s Central Bank Wants to Better Understand Risks of Central Bank Digital Currency
Bank of Thailand (BOT), plans to delay the finalization of its digital retail currency for central banks (CBDC). The monetary policy regulator aims to ensure that this version of the national fiat will offer additional benefits to the country’s financial system under sufficient risk management.
According to the Bangkok Post, a variety of central banks including Thailand have been working on retail CBDCs. However, they still need to implement them fully. The daily quotes Sethaput Suthiwartnarueput as saying that retail CBDCs will be developed over five years.
On Friday, the top executive explained that the bank wants to better understand the benefits and risks of the retail CBDC, and in particular whether there are additional benefits in regards to Promptpay, the nation’s digital payment system. According to the governor, such a central bank is still not in place. Sethaput also emphasized that a digital currency should in the end change the country’s financial system and benefit everyone.
To test the Bank of Thailand’s digital currency, three banks and 10,000 customers will be participating in a limited scale trial. The pilot phase of the project will see the CBDC used to make cash-like payments in exchange for goods or services. This trial phase is expected to start at the end this year. BOT also considers new use cases, and is looking into financial services.
In parallel, the central bank of Thailand has been also working on the development of a wholesale digital currency as a participant in the Mbridge project, along with the Monetary Authority of Hong Kong, the Central Bank of United Arab Emirates, the People’s Bank of China and the Bank of International Settlements. Multi-CBDC distributed ledger platform was created to allow cross-border payments using state-issued digital currency. The group has already completed the project’s first pilot.
Do you expect other central banks to follow the Bank of Thailand’s example and take more time before they introduce their retail CBDCs to the market? Let us know your thoughts in the comment section.
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