Today, local sources reported that the Bank of Thailand has started working with three domestic payment service providers to launch the country’s retail central bank digital currency (CBDC), the digital baht. Tests are taking place in a regulatory sandbox and are expected to run until August this year, with plans to involve up to 10,000 participants. While the central bank has not yet committed to a formal launch decision, it continues to study potential use cases to improve payment efficiency and increase the country’s push toward digitalization.
Thailand’s CBDC tests
As we reported last year, Thailand’s central bank teamed up with the Bank of Ayudhya (a.k.a. Krungsri), Siam Commercial Bank, and 2C2P Thailand to develop and launch the country’s retail CBDC pilot. After delays that pushed the pilot phase to 2023, the tests are finally underway and will be running throughout the summer. The central bank partnered with Germany’s Giesecke+Devrient (G+D) for the CBDC technology.
For the trial, Krungsri invited members of its staff as well as merchants around its offices to test the digital currency in a regulatory sandbox. The bank has set an initial target of 2,000 staff participants, but when the central bank announced the pilot plans last year, it mentioned an overall target of 10,000 users. Participants must first install a mobile banking app and add money to purchase digital baht, which they can then use to pay for goods and services at participating stores.
“The bank educated both merchants and staff about retail CBDC before launching the pilot project, and the test has run smoothly,” Sam Tanskul, Managing Director of Krungsri Innovate, told the Bangkok Post.
Bank of Thailand’s extensive track record
The ongoing tests will complement the Bank of Thailand’s extensive CBDC experience in wholesale applications. In 2021, the bank conducted a trial for cross-border payments with Hong Kong as part of Project Inthanon-Lion Rock. And in 2022, it joined the central banks of China and the UAE for their multi-CBDC bridge project (mBridge), an evolution of Inthanon-Lion Rock.