Thailand Central Bank Starts Testing Its Digital Currency - Digital Baht - Before Public Launch

Thailand’s central bank - Bank of Thailand - has reportedly entered a new phase of testing in the development of its central bank digital currency (CBDC), the Digital Baht.

On Wednesday, July 16, the country’s local news publication The Nation reported that the central bank has CBDC has using it in different financial transactions like some large businesses.

BOT’s assistant governor, Vachira Arromdee said that the central bank has entered the third-phase for the development of its CBDC - The Digital Baht - and soon plans to expand to more businesses.

Reportedly, the Bank of Thailand will also start testing its CBDC with its Hong Kong counterpart, the Hong Kong Monetary Authority. The governor added: “The central bank is also thinking about expanding use of the cryptocurrency to the general public, but a comprehensive study must be completed before taking such action.”

The governor added that having a CBDC comes with both some pros as well as some cons. The positive side is that it will significantly reduce the cost of financial transactions. But simultaneously it might also have some negative impact on commercial banks by removing the need of middlemen in financial transactions.

Vachira also cited the CBDC developments in China. She added that the public rollout of the Digital Yuan hasn’t affected the country’s financial system so far.

BOT officially launched the pilot testing of its CBDC last month in June 2020. The central bank said that before it launches the CBDC system for all businesses across the country, it will first test it with large-scale enterprises.

The announcement reads: “The Bank of Thailand (BOT) has announced the project to develop the prototype of the payment system for businesses using Central Bank Digital Currency (CBDC), which will build upon knowledge from Project Inthanon. The project scope will include conducting a feasibility study and developing a process to integrate CBDC with the business’ innovative platform”.

For its pilot testing, BOT has partnered with Thailand-based fintech firm Digital Ventures Company Limited and the largest cement and building material provider in Thailand, Siam Cement Group (SCG).

Many countries have reportedly started testing its CBDC, the recent ones being Japan and the United Kingdom.