Thailand’s plans to dole out digital currencies to its citizens under an economic revival plan has hit a stumbling block, with government officials calling for a postponement of the launch date.
Initially scheduled for early 2024, Deputy Finance Minister Julapun Amornvivat disclosed that an extension of time is required to develop a secure system for the proposed plan. Amornvivat added that the Finance Ministry is confident of tying up loose ends before the end of the first quarter of 2024.
“The Prime Minister instructed us to be ready to hand out the money by Feb 1, but I am ready to tell him that we cannot make it because we must take time to develop a stable and secure system,” said Amornvivat. “We cannot trade the system for time.”
Thailand’s new government, led by Srettha Thavisin, unveiled an ambitious plan in the build-up to the last general elections to give each citizen above the age of 16 THB 10,000 (US$285) through digital wallets. Recipients of the funds will be restricted to spending the sum within a four-kilometer radius of their primary residence in six months.
The initiative is expected to cost the government up to THB 548 billion (US$15 billion), but members of the ruling Pheu Thai Party argue that the industry could boost the country’s GDP by up to 5% in a year. The Bank of Thailand is adopting a safer stance of a 3% boost but says it will offer a definitive economic forecast in the coming weeks.
Apart from the need to establish a robust security system, the government is still scratching its head over the source of funds for the project. Amornvivat says a cabinet subcommittee is exploring sources to fund the project, including the prospect of borrowing or increasing taxes.
Critics have since poked holes in the project over the risks of increasing public debt to fund the scheme. Former Senator Rosana Rositrakul, in a petition to the State Audit Office (SAO), urged the agency to probe the legality and the rationale behind the scheme, noting that the plans violate the Fiscal Discipline Act and involve debt concealment.
“The 10,000-baht digital wallet scheme can be compared to the rice-pledging scheme of the Yingluck Shinawatra government which resulted in several cabinet ministers being jailed,” said Rositrakul. “I, as a taxpayer, am doing the duty of a citizen in calling for concerned organizations to look into this matter.”
In light of the concerns, there is speculation that the government may tweak the plan only to include indigent citizens to reduce costs.
Ray of hope for digital asset firms
Following large-scale implosions of Three Arrows Capital (3AC), Celsius, and Zipmex, Thai authorities handled the local digital currency industry with an iron fist. A wave of new regulations was rolled in, banning service providers from offering staking and lending services while others required disclosures on all digital asset promotions.
As the effect of the implosions thawed, Thailand announced plans to waive up to $1 billion in taxes for investment tokens to trigger growth in the sector. Plans by the government to turn to blockchain for its new economic initiative have been construed as heralding brighter days for the sector.
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