Don’t Expect a Thai CBDC Soon

Bank of Thailand officials reschedule pilot program for late 2022

article-image

Bank of Thailand; Source: Shutterstock

share

key takeaways

  • Officials from the Bank of Thailand recently announced that they plan to reschedule the first pilots for their CBDC initiative to late 2022
  • Unlike Japan, which has accelerated CBDC efforts as part of a geopolitical posturing in the face of China’s own eCNY, or Russia which fears it might be cut off from SWIFT, Thailand doesn’t have the same need to expedite efforts

Thailand will be taking a slow and steady approach to the implementation of its Central Bank Digital Currency, according to a recent report by Reuters. It’s unlikely to see a Thai CBDC rolled out next year.

Officials are now saying that tests for the digital baht — originally scheduled during the second quarter of the year — will actually take place in late 2022.

Deputy central bank director Kasidit Tansanguan said the nation would proceed slowly in developing a CBDC “to ensure efficiency and prudence” and he emphasized the point of a retail CBDC isn’t to compete with crypto or stablecoins — mediums that the bank doesn’t support for payments given their “inherent risks.”

Reuters reported the pilot will trial deposits, withdrawals and transfers across a user base of 10,000 beta testers.

Why does Thailand want a CBDC?

In a whitepaper published by the Bank of Thailand in April 2021, the bank explains that it intends to create a CBDC to provide Thai citizens with a “reliable form of digital currency” citing the transnational nature of existing digital currencies as a problem for tax enforcement, foreign-exchange rules and all around financial stability.

The paper also cites improving cross-border remittances — the Bank of Thailand is participating in research with central banks in Hong Kong, China, and the UAE  — as well as cracking down on money laundering as secondary reasons for developing a CBDC.

But these reasons don’t convey the same sense of urgency as what’s going on in China, Japan, and Russia.

In the case of China, the People’s Bank of China is concerned that too much control of the money supply is in the hands of mobile payment platforms WeChat Pay and AliPay — a uniquely Chinese problem as Thailand is still a cash-heavy society despite some moves toward reducing reliance on cash with bank-sponsored digital payment platforms.

For Japan, Tokyo believes that a successful Chinese CBDC will threaten US dollar hegemony (despite this not currently being a goal of the PBoC) and thus disrupt the economic status quo in Asia. In order to not be caught flat-footed, politicians are pushing for Japan to accelerate its own CBDC development in order to keep the yen competitive should a digital CNY be successful.

Russia certainly has the most pressing case for a CBDC with a potential invasion of Ukraine likely to spark retaliatory sanctions from the West, which might involve disconnecting Russian banks from the interbank settlement network known as SWIFT. As Blockworks previously reported, the Bank of Russia has ordered its digital ruble project to be accelerated in order to have a trial candidate ready for mid-2022.

The Bank of Thailand has officially said that it does not support the use of cryptocurrencies, such as bitcoin and ether, as payment for goods and services due to what it perceives as the inherent risks involved in the medium. However, local stakeholders are hoping this will change now that Siam Commercial Bank (SCB), the nation’s largest bank, has bought a controlling interest in Thai exchange Bitkub.


Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.


Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

kamino cover.jpg

Research

Kamino has solidified its position as the leading money market on Solana and is emerging as a DeFi bluechip. Although DeFi competition is fierce, Kamino has kept iterating on its product to provide the best-in-class UX, paired with a robust risk management framework and battle-tested infrastructure. Given the rollout of Kamino Lend V2, the protocol may scale aggressively over the coming months, penetrating previously untapped markets in Solana DeFi.

article-image

Also in the tokenized fund space, Franklin Templeton launches on Base and Securitize hits $1 billion in tokenized RWA onchain

article-image

It turns out that bitcoin never actually hit an all-time high in March. Thanks a lot, inflation.

article-image

Spire, Citrea and Nillion also announced raises this week

article-image

The latest recipient of an SEC Wells notice is a Web3 gaming company

article-image

Thursday’s selloff was led by tech stocks, triggered by disappointing outlooks from giants Meta and Microsoft

article-image

Historically, positive returns have been a bit more of a toss-up during the year’s 11th month