Thailand’s central bank digital currency (CBDC) project is taking shape, with the country now entering the third phase of development. The country’s central bank has been testing the CBDC with some of the large businesses as it nears nationwide rollout.
The Bank of Thailand (BoT) revealed that it was entering a new phase in its CBDC development through the assistant governor, Vachira Arromdee. In September, the central bank will begin using the CBDC to transact with the Hong Kong Monetary Authority. The collaboration will allow Thailand to integrate the Hong Kong dollar into its CBDC system, setting the stage for global adoption in the future.
Currently, the CBDC is in use between the regulator and some of Thailand’s large business, Vachira revealed. The regulator has been working with eight local banks and Siam Cement on the wholesale payments system for large businesses.
Once these projects are completed successfully, Thailand will avail the CBDC to retailers. Vachira stated, “After that, we plan on moving into the fourth phase by expanding to retailers, but this phase will require a cautious study of both pros and cons. By moving into the retail market, the CBDC could lead to a major disruption of the overall financial market and financial stability, while the role of financial institutions could be changed.”
These pilot projects are meant to test the suitability of the CBDC for retail use which is the next step. The BoT is, however, not in a hurry as it seeks to ensure that the national rollout runs smoothly.
Vachira stated, “The central bank is also thinking about expanding use of the cryptocurrency to the general public, but a comprehensive study must be completed before taking such action.”
The assistant governor acknowledged the great strides China has made in the CBDC sector, saying Thailand has been learning from China on the risks and opportunities that a CBDC offers.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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