The development of the Bank of Thailand’s (BOT) retail central bank digital currency will take longer than expected (CBDC). The goal of the monetary policy regulator is to make sure that under adequate risk management, this variation of the national fiat will provide additional benefits to the financial system of the nation.
10,000 retail users and three financial institutions are working with the Bank of Thailand to test its digital currency on a small scale in practical settings. The trial phase of the pilot project, which is anticipated to start at the end of this year, will involve using the CBDC for cash-like payments for products and services.
The Bangkok Post reported in a story that while several central banks, including that of Thailand, have been building retail CBDCs, they have not yet fully implemented them. According to BOT Governor Sethaput Suthiwartnarueput, who was quoted by the newspaper, the development of retail CBDC is anticipated to take more than five years before it is introduced to the market.
The bank aims to better understand the advantages and disadvantages of the retail CBDC, in particular whether there are any additional advantages with respect to Promptpay, the country’s digital payment system, the top executive noted on Friday. The governor said that the central bank has not yet observed such. In addition, Sethaput underlined that a digital currency should ultimately alter the nation’s financial system for the betterment of all.
Along with the Monetary Authority of Hong Kong, the Central Bank of the United Arab Emirates, the People’s Bank of China, and the Bank of International Settlements, the Central Bank of Thailand has been working on the creation of a wholesale digital currency as part of the Mbridge initiative. State-issued digital currencies can be used to make cross-border payments thanks to the various CBDC distributed ledger platforms. The team has already finished the initial pilot for the project.
High hopes are held for CBDCs, which may facilitate smoother cross-border transfers and increase financial inclusion. At least 100 nations have expressed a desire for digital fiat or have already commenced the testing process. However, CBDCs have only recently begun to engage in real trial and error, and there are numerous recommendations and plan elements to take into account. The level of access that governments genuinely wish to grant to their CBDCs is one factor that might make it more difficult for CBDCs from different nations to communicate with one another.