CBDC trial pushed to late next year
Stakeholders need time to prepare for initial test
The Bank of Thailand has postponed the testing of its retail Central Bank Digital Currency (CBDC) until late 2022 as it awaits the readiness of related stakeholders to participate in the trial.
The central bank established guidelines for the testing under two tracks: a foundation track initially, followed by an innovation track. The bank previously expected the foundation track testing would begin in the second quarter of 2022.
The stakeholders expected to participate in the testing of the digital baht include financial institutions, merchants, consumers and others, with the number of participants set at more than 10,000, said Kasidit Tansanguan, the central bank's assistant director for the financial markets department.
The central bank discussed a retail CBDC with related parties several times and there are a lot of stakeholder requirements, he said. As a result, the central bank needs to prepare the infrastructure and await the readiness of related parties before testing the digital baht in a closed loop late next year, said Mr Kasidit.
Testing under the foundation track covers basic financial transactions for digital baht payments and digital baht transfers. After the testing is completed, the central bank will move on to testing under the innovation track, he said.
"The testing for both tracks will take more time to ensure digital baht functions and explore innovative use cases help people and the country's economy," Mr Kasidit said.
Sakkapop Panyanukul, the central bank's senior director of the economic and policy department, said its digital baht development aims to transform the country into a cashless society, increasing the efficiency of the payment system, cutting operational cost and supporting innovative technology expansion. The development should reduce social inequality and provide Thais with a convenient method to conduct transactions, he said.
The central bank is not interested in competing with stablecoins, which serve a different purpose than digital currencies, said Mr Sakkapop. Stablecoins and cryptocurrencies are mainly used for investment purposes, he said.
The central bank started CBDC development under the Inthanon project in 2019. A second phase called Project Inthanon-Lionrock used the Hong Kong Monetary Authority.