The Central Bank Of Thailand Continues to Push for Digital Currency

(CTN News) – The Thailand central bank has said that it would devote more attention to studying and creating its central bank digital currency (CBDC).

The Bank of Thailand (BoT) is continuing to create a CBDC but must “ensure it gives extra advantages to the financial system with appropriate risk management,” according to local media on October 29.

According to The Bangkok Post, numerous commercial banks had also created a retail CBDC, but none had yet to make it public.

According to BoT governor Sethaput Suthiwartnarueput, it would take another five years before one is formally introduced in Thailand.

Thai officials are evaluating the hazards and advantages of a digital baht. They are also drawing similarities with PromptPay, the dominant digital payments system in the nation.

Thailand CBDC Pilot to Launch

On a CBDC pilot, the Bank of Thailand works with two commercial banks (Bank of Ayudhya and Siam Commercial Bank). Around 10,000 retail customers will test the digital money. This year’s conclusion marks the start of the pilot, which will go through the middle of 2023.

The programmability of digital money is a topic that the central bank of Thailand is also researching. By doing this, it will be able to manage who has access to it and what they may buy with it.

The International Monetary Fund (IMF) highlighted programmability as a crucial characteristic of a CBDC earlier this month.

The BoT has worked with the Central Bank of the United Arab Emirates, the Hong Kong Monetary Authority, the People’s Bank of China’s Digital Currency Institute, and the BIS Innovation Hub Hong Kong Center. As part of the mBridge initiative, the four have successfully completed the first pilot employing a wholesale CBDC.

Three different kinds of transactions were investigated by mBridge: cross-border transfers in local currencies, cross-border exchanges of foreign currencies between commercial banks, and issuance and redemption of CBDC between commercial banks and central banks.

In Project mBridge, 20 banks in Hong Kong SAR, Thailand, China and the United Arab Emirates used the platform to conduct 164 payment and foreign exchange transactions totalling over $22 million. Read the report: https://t.co/dzQCxz9UYL @hkmagovhk @bankofthailand #CBDC pic.twitter.com/tWwhMszSGC

— Bank for International Settlements (@BIS_org) October 26, 2022

According to the article, mBridge can speed up cross-border transactions from 3-5 days to a few seconds.

Crypto Crackdown

Regarding digital assets, Thailand’s military-backed government has sent conflicting signals. Thailand’s tourist government promotes the nation as being crypto-friendly to entice digital nomads.

But central bankers and financial supervisors have different viewpoints. The Bangkok Post claimed last month that tightening screws had shattered Thailand’s hopes of becoming a centre for the cryptocurrency industry.

The SEC has been going after regional exchanges and their officials, and early this year, it outlawed the use of digital assets as payment methods. It seems like Thailand is copying China. Though it is not a fan of cryptocurrencies, it wants heavily centralized, state-controlled digital money.

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