Bank of Thailand plans retail central bank digital currency pilot test by year end

BANGKOK (Bloomberg): The Bank of Thailand is planning to advance its development of a retail central bank digital currency to a pilot phase by the end of the year, as the country assesses how the technology would work in its financial system.

The BOT doesn’t yet have plans to issue a retail CBDC, it said in a statement, explaining that "the issuance requires thorough consideration of benefits and associated risks for the financial system.” The pilot is part of a study to assess the suitability of technology and design, and will be conducted under a limited scale with selected participants.

The BOT project will assess both the system’s efficiency and safety including the technological design, and programmability, the statement said. This phase of testing will adopt technology developed by Giesecke+Devrient and is expected to begin at year-end and last until mid-2023.

A retail CBDC is a digital form of banknote, and holding it is equivalent to holding banknotes, which are effectively risk-free. The International Monetary Fund says some 100 countries are at varying stages of exploring CBDCs.

In the pilot, the retail CBDC will be used in conducting cash-like activities, such as paying for goods and services, within limited areas and among about 10,000 retail users selected by the BOT, along with Bank of Ayudhya, Siam Commercial Bank and 2C2P (Thailand), the statement said.

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