The Bank of Thailand has set its agenda for a retail central bank digital currency (CBDC) with preliminary testing protocols scheduled to begin in Q2 2022. The central bank revealed this known in a press release issued on Friday calling for public comments on the proposed CBDC roadmap. As part of its plans, the central bank published a preliminary report detailing its CBDC thesis.
“Stablecoins pose risks to monetary sovereignty and financial stability.”
Explaining its motivation for creating a CBDC, the Bank of Thailand pointed out that the success of private stablecoins poses risks to “monetary sovereignty and financial stability.” Earlier, Thailand’s apex bank deemed Thai Baht Digital (THT) — a stablecoin issued by Terra — illegal. At the time, the central bank cited the country’s law prohibiting any other entity from saving the central bank from issuing currency in Thailand. According to the report, the central bank will begin its CBDC developmental efforts by engaging with stakeholders, followed by cost-benefit analysis to ascertain opportunities, risks, and challenges associated with a sovereign digital currency.
“Central bank sees CBDCs as a means of providing greater access to financial services.”
The Bank of Thailand revealed that it was leaving the door open for a CBDC, so they are kickstarting its digital baht testing protocols. Vachira Arromdee, assistant governor of the financial markets operations group at the BoT, said that the central bank sees CBDCs as a means to provide greater access to financial services in the country. According to the assistant governor, the digital baht project could be implemented within the next three to five years. Members have until June to submit their comments on the BoT’s plans for a CBDC. As reported earlier, the Bank of Thailand is also part of a CBDC coalition involving Hong Kong, China, and the United Arab Emirates.