Thailand and CBDC, a new Kingdom to conquer

The Kingdom of Thailand has confirmed its desire to move into Central Bank Digital Currency (CBDC) with an announcement of a test program for individuals by the end of the year. But this isn’t the first time Thailand has changed its mind…

CBDCs, nothing new for Thailand

The Kingdom and the Bank of Thailand don’t seem to know what to do. The launch of a CBDC (editor’s note: called MNBC for the French) is not new, the country having announced in 2020 a partnership with ConsenSys to launch its CBDC.

Since then, the Kingdom has been treading water, even if it means going back on its past declarations…

Thailand goes backwards on CBDC

If the country has been showing a strong attraction for CBDCs for so long, it is strange that the project is not moving forward, or even going backwards.

Indeed, the country was originally supposed to launch a large-scale test for the 2nd quarter of 2022, before finally postponing it.

cbdc thailand, Sethaput Suthiwartnarueput
Sethaput Suthiwartnarueput at Davos

At the World Economic Forum in Davos from May 22 to 26, 2022, Central Bank Governor Sethaput Suthiwartnarueput bluntly stated that there was no urgency to implement CBDCs.

According to him:

“I am fully satisfied with existing online payment options, such as Promptpay and various QR code payment methods. The need to launch a CBDC is not that high.”

Sethaput Suthiwartnarueput , Governor of the Central Bank of Thailand

For him, cross-border wholesale regulations by CBDC will not become a reality for another 5 years!

But for this to become a reality, tests must first be conducted. In this regard, a large-scale test for individuals is planned for late 2022.

Thailand and CBDC, towards a large-scale test at the end of the year?

Well, this time it’s the real deal! 😅

The Bank of Thailand announced yesterday, Friday, August 5, 2022 the launch of a full-scale test for the end of the year.

This test will be divided into 2 parts:

The foundation component

This component will involve 3 companies (Bank of Ayudhya, Siam Commercial Bank and 2C2P) to test CBDC in financial activities using cash today.

10,000 pre-selected individuals will serve as a test group for the technology developed by Giesecke+Devrient (editor’s bill: a German group specializing in banknote, securities and passport printing).

This test, which should begin at the end of 2022, will continue until mid-2023.

The innovation component

The objective of this component, as its name indicates, is to present innovative use cases for the CBDC.

Private and public sector companies will compete in a Hackathon between August 5 and 12, 2022. The winners of this one will receive grants from the Thai government.

One thing is certain, the Kingdom is a perfect paradox when it comes to crypto assets. Between researching CBDC, cancelling, postponing launch, exempting taxes on crypto currencies while simultaneously banning them as a means of payment since April 1. Phew, quite a mess that shows us that the world of tomorrow is shaping up to be more complex than ever.😢