Bank of Thailand to Pilot Retail CBDC Later in 2022
- According to the BOT, this phase will focus on presenting innovative use cases for CBDC.
The Bank of Thailand has disclosed plans to further extend its scope of Retail CBDC development to a Pilot phase by the end of this year. The bank said in a press release on Friday that the proposed development was a way to carefully evaluate how the technology would work in its financial system.
BOT Focuses on Retail CBDC Development
The Bank of Thailand seems obsessed about the idea of a CBDC, thus it is hell-bent on ensuring adequate progress on the development of its Retail CBDC. BOT is reportedly one of the first central banks to acknowledge the importance of CBDC.
According to the release, the bank said it recognizes CBDC’s relevance as a novel financial infrastructure that could foster a future of financial stability.
Although the Bank of Thailand noted it does not have plans to issue a retail CBDC yet, it explained that the retail pilot test was for the purpose of assessment. As such, the issuance requires thorough consideration of benefits and associated risks for the financial system.
Per the announcement, the BOT further explained that the pilot represents part of a study to assess the suitability of technology and design. Thus, the pilot phase will be conducted under a limited scale with selected participants. Moreso, the pilot phase will ensure real-life application of Retail CBDC being conducted in cooperation with the private sector within the limited scale.
BOT unveiled via its statement that the Pilot will be divided into two tracks, being the “foundation track” and the “innovation track”. During the period of the foundation track, the retail CBDC will be used in conducting cash-like activities. This activity includes paying for goods and services, within limited areas and among about 10,000 retail users selected by the BOT, along with three specified companies.
The BOT has planned to schedule the foundation track pilot phase to begin by the end of 2022 and end by mid-2023. Meanwhile, the Innovation track will see the bank hosting a “CBDC Hackathon” by Aug. 5–Sept. 12, 2022. According to the BOT, this phase will focus on presenting innovative use cases for CBDC. Interestingly, the private sector and the public will have a chance to present their use cases for Retail CBDC via the “CBDC Hackathon”.
Notably, the Bank of Thailand is not the only central bank that has retained its faith in the future of CBDCs and is making unrelenting efforts to keep the development of its CBDC in progress.
Reports have revealed that a number of central banks around the world have embraced the idea of a CBDC after acknowledging its potential to increase fortunate opportunities for businesses and the general public.
Just like the BOT, they believe that CBDC is the foundation of the future financial system. Hence it can help the public earn more convenient and greater access to diverse financial services with lower costs.
Meanwhile, there are also certain criticism on the idea of a CBDC which have caused some central banks to slow down on the development of a CBDC in their country. Nigeria can be considered to be on the list of countries that are yet to welcome the idea of a CBDC.
According to a report, the Nigerian lenders have reportedly hindered the use of the country’s digital currency following concerns on the loss of revenue from traditional banking services.