Thailand begins retail CBDC pilot with two banks & a Singapore payment provider
The initiative, which has been put off since last year, would use local companies and bank workers for the test. Every payment processor has released a unique app.
Highlights
- The Bank of Thailand will begin a retail CBDC pilot experiment this month
- The initiative will use local companies and bank workers for the test
- Bank of Ayudhya, Siam Commercial Bank, and 2C2P will collaborate
The Bank of Thailand will begin a pilot project for retail central bank digital currency (CBDC) in a regulatory sandbox this month. It is one of the first central banks to look at the possibilities of retail CBDC for the future of their financial environment.
BOT, in collaboration with CBDC
In the year 2022, the Bank of Thailand (BOT) announced that it will launch a pilot study of retail central bank digital currency (CBDC) and will assess the benefits and associated risks from the pilot to formulate related policies and improve the CBDC design in the future.
In 2018, it declared that it was creating a wholesale CBDC and took part in the Project Inthanon-Lion Rock project with the Hong Kong Monetary Authority and the mBridge cross-border payment initiative with the Bank for International Settlements.
Components of the pilot programme
The new pilot programme would be in addition to earlier wholesale CBDC experiments and retail CBDC proof-of-concept research, both of which were supported by private enterprises. The pilot will be done on a modest scale with a limited number of participants as part of a study to evaluate the possibilities of technology and design.
The pilot is separated into two phases. The first is referred to as the 'Foundation Track’. During this phase, the CBDC will be tested in cash-like activities such as purchasing products and services. The trial will be confined to certain locations and involve 10,000 retail customers. This phase will be used to test the system's efficiency and safety.
The second part, named the ‘Innovation Track,’ will focus on showcasing innovative CBDC applications. According to local media, the first phase will include three large banks. With the Thai central bank taking the initiative, the Bank of Ayudhya (Krungsri), Siam Commercial Bank, and Singapore-based payments service provider 2C2P will collaborate.
Each of those businesses has made a wallet and QR code scanner app accessible to a small group of people. It will also broaden the initiative to include its Ploenchit branch. Through a CBDC Hackathon, the pilot programme will also allow the business sector and the general public to showcase their use cases for retail CBDC.
"The bank needs to determine a strategy to differentiate retail CBDC from the PromptPay service."
The pilot's initial launch date was set for 2022 when it was first revealed in August. The initiative is referred to by the Bank of Thailand as a ‘pilot to learn’ rather than a ‘pilot launch.’
For companies that issue investment tokens, the nation eliminated corporate income tax and value-added tax in March. According to a govt. spokesperson, Thailand might lose over $1 billion in income, but it anticipates investment tokens to bring in $3.7 billion over the next two years.
