The Bank of Thailand is making significant strides in the digital currency space with the launch of a retail central bank digital currency (CBDC) pilot project involving two local banks and a Singapore-based payment service provider. This project demonstrates the country’s willingness to embrace cutting-edge technology, regardless of skepticism that may surround it.
Collaborating with Bank of Ayudhya (Krungsri), Siam Commercial Bank, and Singapore-based payment service provider 2C2P, the retail CBDC pilot will run through a regulatory sandbox inviting up to 10,000 users, until August. Each participating organization has developed an app, which includes a wallet and a QR code scanner, for selected users to access.
The project will see Krungsri enlisting up to 2,000 staff members, plus approximately 100 merchants located around the bank’s headquarters. Siam Commercial Bank will participate similarly, with staff and neighboring merchants taking part in the trial. However, the main hurdle for this venture seems to be distinguishing retail CBDCs from existing PromptPay services, which have already gained popularity in Thailand.
This pilot project, initially scheduled for 2022 before being moved earlier, serves as a stepping stone for the Bank of Thailand to expand its knowledge of CBDCs, despite currently having no official plans to launch one. Prior to this, the bank had announced in 2018 that it was developing a wholesale CBDC. It also participated in projects such as the Bank for International Settlements’ mBridge cross-border payment project and Project Inthanon-Lion Rock with the Hong Kong Monetary Authority.
Furthermore, the Thai government showed support for digital currencies by waiving corporate income tax and value-added tax for companies issuing investment tokens, expecting investment tokens to generate $3.7 billion over the next two years.
The retail CBDC pilot project exemplifies Thailand’s commitment to exploring the potential of new technologies, while highlighting a unique challenge: distinguishing CBDCs from existing payment platforms like PromptPay. Balancing the adoption of ground-breaking technology with mitigating risks is essential in pushing the boundaries in the digital financial world. As the pilot project unfolds, the potential benefits and drawbacks will reveal themselves, shaping the possibilities for other countries considering similar initiatives. In the end, whether the pilot project results in the implementation of a retail CBDC or not, the journey will undoubtedly teach valuable lessons that will help strengthen the global digital financial landscape.
Source: Cointelegraph
