1 minute read
THE THAI EXPERIMENT
by Péter Klemensits
Maintaining monetary stability is a priority in many countries, and it is no coincidence that major powers such as China, Russia and Brazil have been experimenting with central bank digital currencies (CBDC) for some time. In addition, of course, a number of smaller countries have made significant progress in this area, such as Thailand in South-East Asia.
Advertisement
In Thailand, experiments with digital central bank money date back to August 2018, when the Bank of Thailand (BOT) developed a CBDC prototype in partnership with R3 and Wipro, and with the involvement of commercial banks, to launch a project called Inthanon. The Inthanon project aimed to enable domestic money transfers within the country’s interbank system by issuing CBDC tokens.
The first phase of the project focused on building basic payments infrastructure, while subsequent phases explored the application of blockchain technology to other functions. In August 2022, the central bank had already announced that it expected to test the retail digital currency as an alternative payment option from the end of the
Benefits Of Cbdc
1. Technological efficiency
2. Financial inclusion
3. Cost efficiency
4. Reduction of illegal activities
5. Proof of transactions year until mid-2023. During the testing, the retail CBDC will be used to conduct cash-like transactions, such as payments for goods and services, in limited areas and among around 10,000 retail users, the central bank said.
The Central Bank of Thailand is fully aware of the advances in the digital economy and it is no coincidence that it has been among the first in the world to start experimenting with CBDC, while not underestimating the difficulties associated with its implementation. Last October, the Governor of the Central Bank of Thailand, Sethaput Suthiwartnarueput, stressed that the institution was keen to gain as much experience as possible with the CBDC and that it would probably take several years before the currency was ready to be introduced, given the risks and dangers.
The author is a senior researcher at the Eurasia Center
