The Central Bank of Thailand has launched a retail pilot project using the central bank’s digital currency (CBDC).
Within the framework of this project, the Bank of Thailand cooperates with the commercial lender Krungsri – Siam Commercial Bank (SCB) and the Singapore company 2C2P, which specializes in providing services in the field of payments.
Sam Tanskul, managing director of Krungsri Innovate, a division of the financial institution responsible for corporate venture capital, said that the pilot project will last until August. He also said that up to 10 thousand people are participating in the retail trade process with the help of CBDC in the test mode.
Krungsri is one of the first financial institutions to test a retail version of the CBDC application. The bank invited its employees and about 100 sellers, who are based near the lender’s headquarters, to become participants in the digital baht testing process.
Tanskul said that employees of a financial institution to participate in the pilot project need to install a bank application on their smartphones and deposit money, which will then be converted into the virtual currency.
Currently, more than 100 countries of the world are engaged in studying the prospects for the introduction of digital currency. Many states realize that this is a global economic trend that is gaining momentum, ignoring which can cause a lag in the development of the financial system in terms of its compliance with advanced tendencies. Digital money, cryptocurrencies, and other new-generation assets, the distribution of which is carried out without the support of national governments, are already significant competitors to fiat currencies.
Many industry experts say that in the foreseeable future, financial innovations will mainly concern CBDC. Also, in their opinion, active development will be in distributed ledger technology (DLT) and decentralized finance platforms (DeFi). As part of this activity, Thailand and other countries in the Asia-Pacific region are leaders in terms of working with innovative solutions. At the same time, CBDC has not been implemented in any Asian country.
The two most populous countries in the world, China and India, are conducting various experiments with digital currencies. The results of this activity are very successful but may be ambiguous for citizens and businesses.
This year, the European Central Bank (ECB) conducted an experiment to create prototypes, the results of which highlighted the potential of the digital euro. ECB Executive Board member Fabio Panetta, in a letter to Irena Tinagli from the European Parliament, said that after this experiment, there are grounds to assert that the smooth integration of the digital currency into the existing payment landscape is likely to be successful. He also noted that the digital euro can work offline and online.
As we have reported earlier, Reserve Bank of Australia Tests CBDC Use Cases in Pilot.
