Central Bank of Thailand Will Launch CBDC Pilot, But Still Doesn’t Like Crypto

The central bank of Thailand has announced that it plans more time to research and develop its central bank digital currency (CBDC).

On October 29, local media reported that the Bank of Thailand (BoT) continues to develop a CBDC but needs to “ensure that it provides additional benefits to the financial system with proper risk management.”

The Bangkok Post added that several commercial banks have also developed a retail CBDC, but none of them have launched one yet. BoT Governor Sethaput Suthiwartnarueput said it would take another five years before one was officially launched in Thailand.

Thai regulators are weighing the risks and benefits of a digital baht. Additionally, they do comparisons with the country’s leading digital payment platform, PromptPay.

Launch of the CBDC pilot project in Thailand

The Bank of Thailand is collaborating with two commercial banks (Siam Commercial Bank and Bank of Ayudhya) on a CBDC pilot. Around 10,000 retail users will test the digital currency. The pilot will begin at the end of this year and run through mid-2023.

The Thai central bank is also studying the programmability side of a digital currency. This will allow him to control who can use it and what he can spend it on. Earlier this month, the International Monetary Fund (IMF) introduced programmability as a key feature of a CBDC.

The BoT has collaborated with the Hong Kong Monetary Authority, the Central Bank of the United Arab Emirates, the People’s Bank of China Digital Currency Institute, and the BIS Innovation Hub Hong Kong Center. The four have successfully completed the first pilot using a wholesale CBDC under the mBridge project.

mBridge tested three types of transactions: issuance and redemption of CBDC between commercial banks and central banks, cross-border payments in local currencies, and cross-border exchanges in foreign currencies between commercial banks.

Cross-border transactions can be sped up from 3-5 days to seconds using mBridge, the report adds.

Crypto crackdown

There have been mixed messages from the military-backed Thai government regarding digital assets. The country’s tourism ministry is trying to attract digital nomads and portray Thailand as crypto-friendly.

However, central bankers and financial regulators have other ideas. Last month, the Bangkok Post reported that Thailand’s dreams of becoming a crypto hub had been crushed as the screws were tightened.

The SEC has targeted local exchanges and their executives, and it banned digital assets for payments earlier this year. Thailand seems to imitate China. He wants a highly centralized state-controlled digital currency, but doesn’t like crypto.

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