Pheu Thai's digital wallet under scrutiny
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Pheu Thai's digital wallet under scrutiny

Analysts question the party's goals

The campaign pledge involves a 10,000-baht digital handout to every Thai aged 16 and older, delivered to a smartphone.
The campaign pledge involves a 10,000-baht digital handout to every Thai aged 16 and older, delivered to a smartphone.

Blockchain and technology analysts believe the Pheu Thai Party's digital wallet scheme could create a new digital payment infrastructure and stimulate the economy.

However, they said the scheme might not need to include blockchain technology, while there is no need to create a new digital wallet application to implement the project.

The planned digital wallet scheme using blockchain was a party pledge during the campaign, aiming to stimulate growth.

People are focusing on this pledge after parliament this week voted for Pheu Thai leader Srettha Thavisin to become Thailand's 30th prime minister.

Mr Srettha said on Tuesday he is ready to work to improve the living conditions of Thais.

Earlier, Pheu Thai deputy secretary-general Paopoom Rojanasakul said in addition to stimulating the economy, the scheme aims to create a nationwide blockchain-based financial payment system.

Thailand would be among the first countries to introduce this form of digital payment, he said.

The scheme pledges a 10,000-baht digital handout to every Thai aged 16 and older, delivered via smartphone. The digital money can only be spent within a four-kilometre radius of recipients' homes, but this is flexible depending on the locations of the recipients.

The digital money is valid for six months and there is no need to register to access the wallet.

For those without access to the digital wallet app, they can use their national ID card to obtain a personal code in order to spend the digital money.

Sathapon Patanakuha, chief executive of SmartContract Blockchain Studio, said the scheme could help to stimulate the economy and improve the country's digital capabilities.

A new digital payment infrastructure could enable the government to promote specific policies and provide subsidies to targeted sectors, such as small and medium-sized enterprises (SMEs), said Mr Sathapon.

A digital infrastructure would enable SMEs to have better access to financial infrastructure and services, he said.

This infrastructure can be used for the digital ID system to lower know your customer (KYC) system costs, said Mr Sathapon.

He said blockchain has various architectures, complexity of management and levels of security and privacy.

The platform design should be based on vision and use cases, not the technology. The architecture can be a mix of blockchain and other technologies, said Mr Sathapon.

For example, the government can promote digital coupons in second-tier tourism cities for travel and roll out digital baht or the Central Bank Digital Currency in some provinces, he said. Some digital foreign currencies are used with a variety of mixed technologies.

However, Mr Sathapon questioned which parties will be responsible for handling the process of KYC, a standard practice in the investment and financial service sectors used to verify customers.

He referred to Krungthai Bank's Paotang app, which has played a key role in government subsidy schemes. The bank has multiple branches to support the KYC process.

The new government should invite existing digital wallets and mobile banking apps to join the digital money scheme, said Mr Sathapon.

He believes the real goal of the Pheu Thai digital wallet is to create a third financial payment system other than the existing systems of banks and credit card providers.

The government could promote state projects via this new wallet as a way to encourage people to quickly adopt it, he said. This tool would be a new channel for the government to implement its policies, bypassing the existing state digital mechanism, said Mr Sathapon.

He said as a blockchain entrepreneur, he supports projects that promote Thailand's digital capabilities, as increasing digital wallet access should greatly increase the country's potential.

Thanachart Numnonda, founder of IMC Institute, said there are many digital wallet apps, including the Paotang app, that have a large customer base, so there is no need to build a new digital wallet.

The Pheu Thai digital wallet is a big project and rapid implementation as well as scaling up the project should be points of concern, said Mr Thanachart.

He said the government might intend to have its own digital payment infrastructure to provide welfare payments in separate existing payment systems.

The government can transfer the money via the Paotang app and other digital wallet apps by using the country's central database, said Mr Thanachart.

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