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The rise of digital currencies has attracted the attention of central banks around the globe. Many central banks around the world, including the Bank of Thailand (BOT), are now exploring ways to offer their citizens a safe and reliable digital form of central bank money – in the form of a Central Bank Digital Currency (CBDC).
The Bank of Thailand has been studying on Central Bank Digital Currencies (CBDC) since 2018. BOT is currently studying if retail CBDC models are suitable for the country.
And now it’s time to launch a pilot test within limited areas among 10,000 retail users selected by the Bank of Thailand by the end of 2022.
A statement from the BOT said,
“The public’s demand for retail CBDC will gradually increase over time, and that CBDC could become an alternative payment option in the future, partially substituting cash and e-money.”
BOT states that the goals are as follows.
- To become a digital form of central bank money that is safe, reliable and accessible by the public
- To serve as an open digital payment infrastructure that supports inclusion and financial innovation in the digital era
The issuance of retail CBDC could have possible ramifications on the broader economy and financial system. From an extensive list of possible risks and challenges, BOT identifies three primary concerns associated with CBDC issuance.
- Banking disintermediation
- Bank runs and maintaining public trust risks that could directly impact monetary
- Financial stability
However, Siritida Panomwon Na Ayudhya, assistant governor of Payment Systems Policy and Financial Technology Group, the Bank of Thailand (BOT) does not support other digital assets that are not CBDC –such as BTC (Bitcoin) and ETH (Ethereum) – for use as a means of payment for goods and services.
Another statement from the BOT said,
“The decision of whether to issue a retail CBDC would not rest solely on the central bank. It would require consultation with the government, relevant regulatory bodies and stakeholders.”
Currently, Thailand is ranked eighth for retail CBDC in the world and second in Asia, according to the report. If Thailand’s retail Central Bank Digital Currencies (CBDC) is successful, it will be the future of the Thai financial system.
In my opinion, digital assets, digital currency or peer-to-peer electronic cash are inevitable for humankind since the world is moving forward to the digital world.
Atikan Sinthawangkoon is the founder of BitcoinThailand. He wants to help Thai people understand more about Bitcoin.