On top of its wholesale central bank digital currency (CBDC) projects and proof-of-concept Retail CBDC testing with corporates, the Bank of Thailand (BOT) will extend the scope of CBDC development aimed at retail to a pilot phase. A possible real-life application of the "Retail CBDC" will be conducted inside the private sector on a limited scale.
As the Aug. 5 announcement on the official page of the BOT goes:
“The BOT will assess the benefits and associated risks from the Pilot to formulate related policies and improve the CBDC design in the future.”
The pilot is separated into two tracks. During the first one — a “Foundation track” — CBDC will be tested in cash-like activities, i.e. paying for goods and services, within limited areas and a scale of 10,000 retail users. There will be three companies to participate in the experiment — the Bank of Ayudhya, Siam Commercial Bank and 2C2P. The testing should start at the end of 2022 and last until mid-2023.
A second phase dubbed the “Innovation track” will focus on presenting innovative use cases for CBDC. The private sector and the public will have a chance to present their use cases for Retail CBDC via a "CBDC Hackathon," which will take place Aug. 5 – Sept. 12, 2022. Selected participants will get mentorship from experienced financial institutions.
In the meantime, the BOT doesn’t plan to issue Retail CBDC, “as the issuance requires thorough consideration” of risks and benefits for the financial system in general.
Related: Strict Thai crypto regulation causes SCB to delay Bitkub acquisition
On Aug. 4, Thailand’s financial regulator, the Securities and Exchange Commission (SEC) granted operating licenses to four digital asset operators, despite turmoil regarding the Singaporean exchange Zipmex, which suspended withdrawals for customers in the country in July. Crypto volumes in Thailand surged almost 600% in early 2021 as the bull market was building momentum.