Thailand’s Central Bank Initiates Retail CBDC Pilot

This month, the Bank of Thailand will launch a regulatory sandbox-based central bank digital currency (CBDC) pilot initiative for retail use.

According to local media, three payment processors will take part. Through August, the industry will involve up to 10,000 users.

The Thai central bank will collaborate with the Bank of Ayudhya (Krungsri), Siam Commercial Bank, and Singapore-based payments service provider 2C2P on the initiative.

Each of these organizations has made an app with a wallet and a QR code scanner available to select users.

Krungsri will enlist up to 2,000 staff members and approximately 100 merchants near the bank’s headquarters to participate in the initiative.

Additionally, it will expand the industry to its Ploenchit branch. Sam Tanskul, managing director of Krungsri Innovate, stated that:

“The bank needs to determine a strategy to differentiate retail CBDC from [its] PromptPay service.”

Siam Commercial Bank’s prototype would function similarly to Krungsri’s, with staff and nearby merchants participating.

Initially scheduled to debut in 2022, the pilot was disclosed in August. The Bank of Thailand has referred to the initiative as a “pilot to learn” instead of a pilot launch.

There are no official intentions for the central bank to launch a CBDC.

In 2018, the Bank of Thailand announced it would develop a wholesale CBDC.

It participated in the mBridge cross-border payment initiative of the Bank for International Settlements and the Inthanon-Lion Rock project with the Hong Kong Monetary Authority.

In March, the nation exempted companies that issue investment tokens from corporate income tax and value-added tax.

A government spokesman estimated that Thailand could lose about $1 billion in revenue over the next two years, but investment tokens would generate $3.7 billion.