Bank of Thailand to trial CBDC as cash substitute

Thailand’s central bank announced it will test its retail digital currency for the public in the second quarter of 2022 as an alternative payment option

The Bank of Thailand is set to pilot a central bank digital currency next year.

The BOT’s Assistant Governor – Vachira Arromdee – said the bank will test the CBDC for cash-like activities within a limited scale, such as paying for goods and services.

According to Arromdee, the CBDC could become an alternative payment option in the future as a partial replacement for cash and e-money.

“The bank needs to be more cautious in its approach to a wider retail digital currency,” she said.

“By moving into the retail market, could lead to a major disruption of the overall financial market and financial stability, while the role of financial institutions could be changed.”

Demand expected to grow

The bank also believes demand will grow over time and that most of it will come from the private sector and technology developers, with the Bank of Thailand deciding the criteria for participation.

The bank added the CBDC would be “non-interest bearing and would be distributed to the general public by intermediaries like financial institutions”.

Conditions or limits on the amount of CBDC that can be held will also be established.

Generally, CBDC is divided into wholesale, limited to financial institutions, and retail is everyone else.

After initially trialling a wholesale currency, the BOT has adopted an approach of first testing a retail CBDC for the corporate sector, before exploring a broader reach to consumers via retailers.

Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

telegram

Previous Article

Crypto ETPs 'six times more expensive' than ordinary custodial services

Next Article

Dogecoin drives Robinhood Q2 revenue growth

Read More Related articles

Latest Guides

Find in-depth articles, guides and videos designed to give you a better understanding of Bitcoin, DeFi, trading, security and much more.

Get started