The Bank of Thailand is set to launch a retail central bank digital currency (CBDC) pilot project this month within a regulatory sandbox, involving three payment providers and targeting up to 10,000 users. The pilot, which will run until August, aims to gather valuable insights and learnings.
Partnering with the Thai central bank for this initiative are Bank of Ayudhya (Krungsri), Siam Commercial Bank, and Singapore-based payments service provider 2C2P. Each of these organizations has introduced their own app, specifically designed for selected users, which includes a wallet feature and a QR code scanner.
Krungsri, planning to enroll 2,000 staff members, along with approximately 100 merchants surrounding its headquarters, aims to expand the project to its Ploenchit branch. Sam Tanskul, the managing director of Krungsri Innovate, emphasized the importance of developing a strategy to differentiate the retail CBDC from its existing PromptPay service.
Siam Commercial Bank will follow a similar approach to Krungsri, involving its staff and neighboring merchants in the pilot.
Initially announced in August and originally slated for launch in 2022, the pilot program aims to serve as a learning experience rather than a full-scale launch of a CBDC. The Bank of Thailand has no current plans for an official CBDC launch.
In 2018, the Bank of Thailand revealed its development of a wholesale CBDC and has actively participated in various projects, such as the Bank for International Settlements’ mBridge cross-border payment initiative and the Project Inthanon-Lion Rock project in collaboration with the Hong Kong Monetary Authority.
Furthermore, in March, the Thai government waived corporate income tax and value-added tax for companies issuing investment tokens. Although this move is projected to result in an approximate loss of $1 billion in revenue for Thailand, it is expected that investment tokens will generate a substantial $3.7 billion over the next two years.
Thailand’s retail CBDC pilot represents a significant step toward exploring the potential of digital currency in everyday transactions. With the involvement of key banking institutions and a Singapore payment service provider, this initiative aims to gain crucial insights that will inform future developments in the country’s financial landscape.
