The Bank of Thailand has announced it is to conduct tests of a central bank digital currency for retail use, in a move that could pave the way for a wider roll-out of the technology in the country.
The Thai central bank said it would begin testing the system in the second quarter of 2022, which would be offered as an alternative payment method to other currently accepted currencies and forms of payment for consumers.
Vachira Arromdee, the bank’s deputy governor, said the central bank digital currency would not have an impact on the money supply, or on monetary policy in the country, as per remarks at a news conference this week.
The test phase will see the CBDC being used for payments in goods and services at a small scale, aiming specifically at retail volumes and levels of payment. Designed to operate on a limited scale basis at first, the bank said the trial will present an opportunity to pilot the acceptance, use and conversion of the digital currency to inform future policy.
The bank said it projects that demand for the digital currency will grow over time with increased usage, and that it could ultimately come to rival cash and e-money volumes currently handled in the country.
The central bank is to carry out an assessment phase after the trial is underway, looking at the risks and benefits of the CBDC. In particular, the central bank said it would look to establish whether the currency is beneficial to all economic participants, while ensuring it does not undermine financial and economic stability in the country.
The pilot phase announcement comes at a time of increasing experimentation with CBDCs around the world, with major global central banks all exploring their own implementations of the technology.
With pilot projects like that Thai scheme already underway, CBDCs look set to play an increasing role in economies, and particularly payments, in the years to come.