Bank of Thailand plans pilot test of retail central bank digital currency by year-end

BANGKOK (Bloomberg): The Bank of Thailand plans to move its development of a retail central bank digital currency into a pilot phase by the end of the year as the country assesses how the technology would work in its financial system.

The BOT has no plans to issue a retail CBDC yet, it said in a statement, explaining that “issuance requires careful consideration of the associated benefits and risks to the financial system.” The pilot is part of a study to assess the suitability of the technology and design, and will be conducted on a limited scale with selected participants.

The BOT project will assess both system efficiency and security, including technology design, and programmability, the statement said. This test phase will adopt technology developed by Giesecke+Devrient and is expected to start at the end of the year and last until mid-2023.

A retail CBDC is a digital form of a banknote, and holding it is equivalent to holding banknotes, which are effectively risk-free. The International Monetary Fund says about 100 countries are in various stages of exploring CBDCs.

Under the pilot, the retail CBDC will be used to conduct cash-like activities, such as payment for goods and services, in limited areas and among approximately 10,000 retail users selected by the BOT, as well as Bank of Ayudhya, Siam Commercial Bank and 2C2P (Thailand), the statement said.

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