The Bank of Thailand (BoT) has announced its plans to commence its retail Central Bank Digital Currency (CBDC) trials by the end of this year. The retail trial of the CBDC was described as a part of the bank’s efforts to position itself right for the future of money which it believes can be dominated by retail central bank money.
With the BoT amongst the first central banks worldwide to go all out in developing its CBDC product, the retail trial also comes as a new milestone as the project has had successful wholesale CBDC trials.
“In addition to previous Wholesale CBDC 2 projects and Proof-of-Concept Retail CBDC testing with corporates, the BOT deems it necessary to extend the scope of Retail CBDC development to a Pilot phase in which real-life application of Retail CBDC will be conducted in cooperation with the private sector within a limited scale,” the Bank of Thailand announcement reads, adding that it “will assess the benefits and associated risks from the Pilot in order to formulate related policies and improve the CBDC design in the future.”
Dynamics of the Bank of Thailand Retail CBDC Testing
The Bank of Thailand said its retail CBDC testing which has been scheduled to hold by year end will be divided into two phases including the ‘Foundation Track’ and the ‘Innovation Track’.
Under the foundation track, the BoT will involve as many as 10,000 participants to conduct active cash transactions with the CBDC in a controlled environment.
The goal here is to “assess the system’s efficiency and safety including the technological design.” For the Foundation Track, the Bank of Thailand will be working with three other firms including the Bank of Ayudhya Public Company Limited, Siam Commercial Bank Public Company Limited, and 2C2P (Thailand) Company Limited.
The Innovation Track will be primarily centered on building innovative use cases for the CBDC in a bid to offer it more value for users. A hackathon will be organized in this phase and participants will gain access to leaders and experts in Project Inthanon.
Along with the announcement, the Bank of Thailand emphasized that it has not made the final decision to float a retail CBDC for use in the country yet as this will entail a more diligent consideration of all risks and benefits in the broader economy.