The BOT is also working on its wholesale central bank digital currency projects and proof-of-concept retail CBDC testing with corporates. For retail CBDC, a real-life application test of the project will be conducted inside the private sector on a limited scale.
The pilot phase consists of two tracks named ‘Foundation track’ and ‘Innovation track.’
As part of the Foundation track, CBDC will be tested in cash-related scenarios such as paying for goods and services. Testing will include 10,000 retail users and will take place in limited areas. As for the companies that will participate in the experiment, they are the Siam Commercial Bank, 2C2P, and the Bank of Ayudhya. Testing should begin near the end of 2022 and would last until mid-2023.
The Innovation track will focus on programmability and will present innovative use cases for the digital currency. According to the official press release, this will aid the BOT to develop and improve the design of CBDC to suit the Thai context in the future. Both the private sector and the public will get a chance to present their use cases for retail CBDC during a hackathon.
The hackathon is still accepting submissions until 12 September 2022, and selected participants or teams will receive guidance from experienced financial institution members from Project Inthanon. Project Inthanon is a collaborative effort involving the Bank of Thailand and commercial banks that aims to explore the potential benefits of Distributed Ledger Technology (DLT) in enhancing Thailand’s financial infrastructure.
According to thaienquirer.com, the Central Bank of Thailand doesn’t see a need to rush retail CBDC adoption. In May 2022, the same source pointed to an interview given by the bank’s governor to local media TNN during the World Economic Forum’s Annual Meeting 2022 in Davos, Switzerland. During the interview, the governor mentioned that Thailand has strong payment alternatives to CBDC, including QR code payments and a real-time online transfer option named PromptPay.
According to beincrypto.com, Thailand is trying to promote mobile technologies and these QR-code-based systems as part of an economic model dubbed ‘Thailand 4.0.’ However, the same source notes that these QR-code-based systems can be difficult to use by the country’s elderly population, particularly by those who are not familiar with smartphones.
As it prepares to enter the pilot phase of its retail CBDC development project, the BOT still doesn’t plan to issue retail CBDC without first weighing the risks and benefits for the financial system in general.
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