The Bank of Thailand has announced it will be extending the scope for developing its central bank digital currency (CBDC). This process will be followed by launching the country’s wholesale CBDC projects and proof-of-concept retail CBDC testing with corporates.
Bank of Thailand to pilot a retail CBDC by year end
The possible real-life application of a retail CBDC will be launched within the private sector on a limited scale. The announcement issued on Friday on the official page of the BOT said that the CBDC would allow the central bank to assess the benefits and risks linked from the pilot phase of the project to create policies and improve the future design of the CBDC.
The pilot phase for the CBDC is separated into two sections. The first is the “Foundation track” CBDC, which will be tested through cash activities such as the payment of goods and services within the limited areas and a scale comprising 10,000 retail users.
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Three companies will be part of this experiment. These include 2C2P, the Bank of Ayudhya, and Siam Commercial Bank. The testing phase for this project will commence towards the end of 2022, and it will last until mid-2023.
The second phase will be known as the “Innovation Track.” This phase will focus on presenting innovative use cases for a CBDC. The private and public sectors will get a chance to demonstrate the use cases of a retail CBDC through a CBDC hackathon that will commence on Friday, August 5, and end on September 12, 2022.
The selected participants in this retail project will get mentorship from renowned financial institutions. The Bank of Thailand has also halted plans to issue a retail CBDC. The issuance of this CBDC requires an assessment of all the risks and benefits of the entire financial system.
Crypto regulations in Thailand
On August 4, the financial regulator in Thailand, the Securities and Exchange Commission (SEC), issued operating licenses to four digital asset companies in the country. The licenses were issued despite the uncertainty in the market following the suspension of withdrawal services by the Zipmex exchange.
Thailand is also ranking as a major hub for crypto activities. Crypto trading volumes in Thailand increased by nearly 600% earlier this year amid the growing momentum of the bull market. Crypto trading volumes in Thailand remained relatively the same despite the declining prices.