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. According to the head of the monetary authority, the development of the state-issued coin may take several years.
Thailand’s Central Bank Wants to Better Understand Risks of Central Bank 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 the national fiat will offer additional benefits to the country’s financial system under sufficient risk management.
A number of central banks, including that of Thailand, have been developing retail CBDCs but they are yet to fully implement them, the Bangkok Post noted in a report. Retail CBDC development is expected to take more than five years before market launch, according to the BOT Governor Sethaput Suthiwartnarueput, quoted by the daily.
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. The central bank has yet to see such, the governor remarked. Sethaput also emphasized that a digital currency should in the end change the country’s financial system and benefit everyone.
The Bank of Thailand is collaborating with three financial institutions and some 10,000 retail users to conduct limited-scale tests of its digital currency in real-life applications. As part of the pilot project, the CBDC will be used for cash-like payments for goods and services during the trial phase expected to begin 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 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. The multiple CBDC distributed ledger platform is designed to facilitate cross-border payments with state-issued digital currencies. 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? Tell us in the comments section below.