Thailand’s central bank has launched a pilot retail central bank digital currency (CBDC) project.
According to a Monday (June 12) Bangkok Post report, the Bank of Thailand is working with Bank of Ayudhya – or Krungsri – Siam Commercial Bank (SCB), and Singapore-based payments service firm 2C2P to conduct the trial.
Sam Tanskul, managing director of Krungsri Innovate, the bank’s corporate venture capital arm, said that the project will run until August and involve up to 10,000 users.
Krungsri, one of the first financial institutions to test a retail CBDC, has invited its staff and about 100 merchants based near Krungsri’s headquarters to test the digital baht. According to Tanskul, staff members taking part in the CBDC project will need to install a mobile banking app and add money to it that will be converted into digital currency.
As PYMNTS reported earlier this year, more than 100 countries around the world are investigating digital currencies as they worry about being left behind “as digital, crypto and other currencies not backed by national governments continue encroaching on the use of physical, native fiat.”
Industry observers say that some of the most crucial financial innovations this year will be centered on the development of central bank digital currencies (CBDCs), as well as future-fit experiments with distributed ledger technology (DLT) sandbox initiatives and decentralized finance (DeFi) platforms.
Thailand and other countries in the Asia-Pacific region are leading this charge. Although no Asian government has formally debuted a CBDC, the world’s two most populous countries, China and India, are both well on the way with their experiments, although to mixed results from their citizens and businesses.
More recently, the European Central Bank (ECB) conducted a “prototyping exercise” that shows the potential of a digital euro.
“This exercise shows that it is possible to smoothly integrate the digital euro design choices into the existing payment landscape while leaving ample scope for innovative features and technologies,” ECB Executive Board member Fabio Panetta wrote in a letter to Irene Tinagli of the European Parliament. “The findings also show that a digital euro, using independent designs, could theoretically work both online and offline.”
In addition, the ECB carried out market research to get an idea of “the industry-specific knowledge and the ongoing experience of building potential technical solutions for a digital euro,” and learned that there is “a sufficiently large pool of European providers that are able to develop digital euro solutions,” the bank said in a news release.
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