The central bank of Thailand is not going to rush with the launch of its digital currency as it is not yet sure of the benefits it would bring. According to the head of the monetary authority, the development of the state-issued coin could take several years.
The Central Bank of Thailand wants to better understand the risks of the Central Bank’s digital currency
The Bank of Thailand (BOT) intends to take more time to complete the development of its retail central bank digital currency (CBDC). The monetary policy regulator aims to ensure that this version of domestic fiat will provide additional benefits to the country’s financial system under sufficient risk management.
A number of central banks, including Thailand’s, have developed retail CBDCs, but have yet to fully implement them, the Bangkok Post noted in a report. The development of retail CBDCs is expected to take more than five years before market launch, according to BOT Governor Sethaput Suthiwartnarueput, as quoted by the daily.
On Friday, the top executive explained that the bank wanted to better understand the benefits and risks of the retail CBDC, and in particular whether there are additional benefits when it comes to Promptpay, the country’s digital payment system. The central bank has yet to see that, the governor noted. Sethaput also pointed out that a digital currency should ultimately change the country’s financial system and benefit everyone.
The Bank of Thailand is working with three financial institutions and some 10,000 retail users to conduct limited-scale testing of its digital currency in real-world applications. As part of the pilot project, the CBDC will be used for cash payments for goods and services during the trial phase which is expected to start at the end of this year. The BOT is also considering innovative use cases and new financial services.
In parallel, the central bank of Thailand has also been working on the development of a wholesale digital currency as a participant in the Mobridge project, alongside the Hong Kong Monetary Authority, the Central Bank of the United Arab Emirates, the Bank People’s People of China and the Bank for International Settlements. The CBDC multiple distributed ledger platform is designed to facilitate cross-border payments with government-issued digital currencies. The group has already carried out the first flyer project of project.