Thailand Launches Digital Wallet Initiative to Aid Lower-Income Citizens

Thailand's Finance Minister, Pichai Chunhavajira, has confirmed the implementation of a new plan to distribute social benefits in digital money, aimed at aiding lower-income Thais. This initiative, originating as a campaign promise by the Pheu Thai party, will see up to 45 million citizens receiving 10,000 baht (approximately $280) in digital money on August 1. This amount represents about two-thirds of the country's average monthly income.

The Digital Wallet plan, a key component of the Pheu Thai party's successful election campaign, will cost $13.8 billion and is set to benefit Thais aged 16 and older with incomes under $23,000 and savings below $13,700. Funding for this initiative was secured through supplemental national budget allocations approved by parliament earlier this month. Proponents believe the plan will invigorate Thailand's domestic economy, which has experienced growth rates of less than 2% annually over the past decade.

To facilitate the distribution, recipients can download the digital wallet app from both Google Play Store and Apple App Store and register through the Thang Raj (Government Path) app. For those without smartphones, registration and usage of the benefit will be possible in person, albeit with some restrictions. 

Despite its benefits, the Digital Wallet plan has been a topic of controversy since the Pheu Thai party's election win in August 2023, receiving approval only in January. The program includes several limitations, such as Know Your Customer verification to exclude prisoners and individuals or businesses with records of economic abuse. There are also specific restrictions on the types of items that can be purchased with the digital money.

While the technology underpinning the digital wallets remains unspecified, it's notable that the Bank of Thailand recently concluded a pilot project for a retail central bank digital currency (CBDC), although it does not currently plan to issue a CBDC. Additionally, Prime Minister Srettha Thavisin, who assumed office following the last election, has a 15% stake in X Spring, a Thai asset tokenization provider.