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Thailand is proceeding with its plan to distribute nearly $14 billion in digital money to revive its lagging economy.
Prime Minister Srettha Thavisin rose to power in 2023, and one of his key election pledges was to boost the country’s economy through handouts to lower-income Thai citizens.
He plans to distribute $13.8 billion to Thais aged 16 or older who make less than $23,000 annually. According to the Finance Ministry, this encompasses nearly 50 million citizens, with each set to get $280 from the government, which equates to over 60% of the average monthly wages in the country.
This week, the ministry shared more details on the disbursement. The process starts with user registration on a digital wallet, which kicks off on August 1 and is expected to continue for six weeks. Thais without smartphones can only begin registration after the first phase in mid-September.
Thavisin’s administration is unclear on the technology through which it will distribute the funds. In its first communication last year, it referenced a blockchain utility token that would be accepted across most merchant stores.
Thavisin’s Pheu Thai Party also pledged to roll out a national blockchain-powered payment system and said it supports the digital baht CBDC efforts.
However, all mention of blockchain has been absent since, including in its latest announcement.
The digital money handouts come with restrictions, starting with KYC verification to restrict those in prison and those whose bank savings exceed $13,800. They can also only be spent within a four-kilometer radius on face-to-face transactions and can’t be used to purchase lottery tickets, alcohol, tobacco, electrical and electronic appliances, or precious metals like gold. They must also be used for payments and can’t be exchanged for cash.
The government says all these restrictions are to ensure that the handouts directly boost the local economy. Thavisin adds that the handouts will cause “an economic tornado” and boost GDP by up to 1.6%. Thailand’s economy has lagged in recent years, growing by around 2% annually on average over the past decade. In contrast, neighbors Malaysia and Indonesia recorded 8.7% and 5.3% growth in 2022, respectively.
While some economists have criticized the program as unsustainable, Thavisin’s government stands firm.
“The government needs to spend money on its urgent policies to help boost the economy, and it can’t wait for the funding for the next fiscal year,” the PM told lawmakers as he drummed up support for budgetary increases to accommodate the program.
Watch: CBDCs are more than just digital money
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