Thailand Banks Collaborate with Central Bank for Retail CBDC Test Project

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The Bank of Thailand has revealed its plans to launch a pilot project for a retail central bank digital currency (CBDC) within a regulatory sandbox, commencing this month. 

The project aims to engage up to 10,000 users and will run until August 2023.

Partnering with the Thai Central Bank on this groundbreaking project are the Bank of Ayudhya (Krungsri), Siam Commercial Bank, and the Singapore-based payments service provider 2C2P. These organizations have introduced dedicated applications to a select group of users, featuring integrated wallets and QR code scanners.

Krungsri in particular plans to involve approximately 2,000 of its staff members in the pilot, alongside nearly 100 merchants situated in proximity to the bank's headquarters. Furthermore, the project will expand to include Krungsri's Ploenchit branch. 

Expressing his thoughts on the matter, Sam Tanskul, Managing Director of Krungsri Innovate, stated, "The bank must develop a strategic approach to differentiate the retail CBDC from our existing PromptPay service."

Siam Commercial Bank's pilot program will operate in a similar fashion to that of Krungsri, with the active participation of its staff and neighboring merchants.

It is important to note that the Bank of Thailand perceives this endeavor as a "pilot to learn" rather than a full-fledged launch, emphasizing that no official plans for the deployment of a CBDC are currently in place.

The Bank of Thailand previously initiated the development of a wholesale CBDC in 2018, and has since been involved in notable ventures such as the Bank for International Settlements' mBridge cross-border payment project and the Project Inthanon-Lion Rock project in collaboration with the Hong Kong Monetary Authority.

Furthermore, in a move to bolster the growth of the digital token industry, the Thai government waived corporate income tax and value-added tax for companies issuing investment tokens in March 2023. Although this decision is anticipated to result in an estimated revenue loss of around $1 billion, investment tokens are projected to generate approximately $3.7 billion within the next two years.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash