The Thai central bank The Bank of Thailand is to test a Retail Central Bank Digital Currency (CBDC). And the BOT is now seeking feedback on the subject.

Retail CBDC is a digital form of money issued by the central bank comparable to physical banknotes. Moreover, it can be used in financial transactions both online and offline.

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Retail CBDC is easily portable and has the potential to be used in various innovative financial services.

The BOT’s main objective in exploring Retail CBDC is to provide citizens with access to more convenient and secure financial services. In addition, the development of a Retail CBDC will support a technology-led future that is efficient and cost-effective. At the same time, it can contribute to the development of more diverse and innovative financial services.

The development of a Retail CBDC is a key milestone. It offers the potential to alter the financial infrastructure and ultimately the financial landscape. And so, this could cause broad changes in the roles of many stakeholders.

Thai digital currency: potential risks

The BOT has published a paper titled ‘The Way Forward for Retail Central Bank Digital Currency in Thailand’. This aims to foster understanding about CBDC and further discussion on this matter.

The report also identifies a number of risks summarised as follows. Firstly, disintermediation of financial intermediaries and the exacerbation of bank runs, especially in times of financial crises. In addition, the BOT recognises the cost of maintaining high security standards and public trust in the CDBC system.

Looking ahead, the central bank plans to begin testing a digital currency next year. It would then aim to implement fully over the next three to five years.

DCash goes live

Meantime, the Eastern Caribbean Central Bank’s digital currency, DCash is going live.

DCash is a securely minted digital version of the Eastern Caribbean dollar issued by the ECCB. It aims to offer a safer, faster, cheaper way to pay for goods and services. And users can send EC funds to other DCash users using a smart device. Consumers and merchants sign up to use DCash by downloading the DCash App from the Google Play or Apple Store. The ECCB has been working in partnership with Bitt Inc for over two years to develop this digital version of the EC currency. As in Thailand, the aim is to increase financial inclusion and competitiveness.