The Bank of Thailand expects to begin testing its retail digital currency at the end of this year and the process will continue through mid-2023.
According to a statement issued yesterday on the progress of the Retail Central Bank Digital Currency (Retail CBDC) development, the central bank will assess the benefits and risks from the pilot in order to formulate related policies and improve the CBDC's design in the future.
The pilot will be separated into two tracks -- a Foundation track and an Innovation track. The Foundation track will assess the system's efficiency and safety including technological design.
During the Foundation track phase, CBDC will be used in conducting cash-like activities, such as paying for goods and services within limited areas and scale of approximately 10,000 retail users selected by the central bank along with three companies, namely the Bank of Ayudhya, Siam Commercial Bank and 2C2P (Thailand) Co.
This phase of testing is expected to begin at the end of 2022 and last until mid-2023.
The Innovation track will focus on programmability which will facilitate the development of innovative use cases for CBDC, resulting in new financial services for a wide range of customers.
Under this track, the central bank will allow the private sector and the public to participate in presenting business use cases for Retail CBDC via a "CBDC Hackathon". Those who wish to participate in the Hackathon can apply until Sept 9.
At present, the central bank does not have plans to issue Retail CBDC as the issuance requires thorough consideration of the benefits and associated risks for the financial system, according to the statement.
The central bank also warns that as these tests will be conducted on a limited scale with selected participants, the public should be cautious of fraud and scams claiming to provide Retail CBDC-related services or investments.