Bank of Thailand Will Run Its CBDC Trial Later This Year

Central bank digital currencies, or CBDCs, are an intriguing albeit immature concept. Various central banks want to experiment with issuing a native digital currency, but much research and development are needed. Bank of Thailand is the latest entity to create a retail CBDC pilot, which will kick off in late 2022. 

Bank of Thailand CBDC Trial No One Really Wants

Banks and other financial institutions want to retain control over consumer spending, lending, and borrowing. With demand for physical cash waning, they now set their sights on digital currencies or CBDCs. Bank of Thailand expects big things from its central bank digital currency plot, which runs from late 2022 until mid-2023. It is not a long period to gather crucial feedback, but it may help indicate whether such solutions are necessary for the country. 

This initial study will gauge the public’s interest in CBDCs and determine if other central banks want to get on board. Rather than building a native CBDC, the world would be better off under one unified currency. It would negate foreign exchange rates and help solve inequality. Unfortunately, financial institutions refuse to acknowledge that option while exploring central bank digital currencies. 

The Bank of Thailand is still one of the first entities to explore the potential of a retail CBDC. While it may facilitate a broader diversification of the Thai economy and introduce new business opportunities, it will also introduce new risks and restrictions. For the average person, very little will change, as they still do not control their money. Everything will still require approval from the central bank and government as it does today.

The pilot phase will be split into two objectives. First, the technology powering the CBDC will be tested with the help of 10,000 retail consumers. Its second stage determines the programmability of CBDC for various customer types, enabling the bank to observe real-world applications and adapt the design where necessary. All of this information needs to be collected in a few short months, indicating the central bank digital currency will not hit the mainstream until at least 2024.