Bank of Thailand Set to Kick off Retail CBDC Pilot by End of 2022

Bank of Thailand Set to Kick off Retail CBDC Pilot by End of 2022

by August 8, 2022

The Bank of Thailand (BOT) said on Friday that it will be conducting a retail Central Bank Digital Currency (CBDC) pilot at the end of 2022.

According to the central bank, the BOT deems it necessary to extend the scope of retail CBDC development to a pilot phase in which real-life applications will be conducted in cooperation with the private sector within a limited scale.

However, the BOT reiterated that it does not have plans to issue a retail CBDC at the moment.

The BOT will assess the benefits and associated risks from the pilot in order to formulate related policies and improve the CBDC design in the future.

The pilot will be separated into two tracks, the first being the “Foundation Track” to assess the system’s efficiency and safety including the technological design.

During this phase, CBDC will be used in conducting cash-like activities, such as paying for goods and services, within limited areas and scale of approximately 10,000 retail users selected by the BOT along with three companies, namely the Bank of Ayudhya Public Company Limited, Siam Commercial Bank Public Company Limited, and 2C2P (Thailand) Company Limited.

This phase of testing will adopt technology developed by Giesecke+Devrient and is expected to begin at the end of 2022 and last until mid-2023.

The second one will be the “Innovation Track” to focus on programmability which will facilitate the development of innovative use cases for CBDC, resulting in new financial services for a wide range of customers.

This will help the BOT develop and improve the design of CBDC to suit the Thai context in the future.

The BOT will allow the private sector and the public to participate in presenting business use cases for Retail CBDC via a “CBDC Hackathon”.

Those who wish to participate in the Hackathon can apply during 5 August – 12 September 2022.

Selected participants or teams will receive mentorship from experienced financial institution participants from Project Inthanon. Further details will be announced on the BOT website.

This pilot is in addition to previous wholesale CBDC projects and Proof-of-Concept Retail CBDC testing with corporates which include Project Inthanon (Phases I and 2) and Project Inthanon-LionRock (Phases I and 2).