The 'Central Bank' is advancing the development of the 'Digital Baht' to help reduce costs for 'transfers and payments'. Recently, they are intensifying tests in collaboration with the private sector while studying plans for its use with 'retail customers'. They emphasize the need for careful study to avoid impacting the financial system and banks. Meanwhile, 'Krungsri' is confident there will be no adverse effects and believes it will benefit the economy.

Ms. Wachira Aromdee, Assistant Governor of the Financial Markets Department at the Bank of Thailand (BOT), stated that the development of the digital currency (Digital Currency) issued by the central bank (Central Bank Digital Currency or CBDC) under the "Inthanon" project has now reached phase 3. Currently, it is being tested for digital currency transfers between banks, as well as for buying and selling bonds. They are also preparing to expand cooperation with the Hong Kong Monetary Authority to test cross-border transfers without intermediaries, with an announcement expected around September.

In the next phase, the BOT will test the use of CBDC with larger businesses, having previously conducted trials with some private entities. Therefore, it is expected that the use of CBDC with large businesses will become clearer within this year.

Once testing and studies are completed with large businesses, there may be potential to extend its use to individual consumers in the future. However, the use of digital currency for retail customers requires comprehensive impact studies, including both advantages and disadvantages, to assess its effects on the stability of the financial system and financial institutions. The BOT does not wish to compete with commercial banks, so introducing it for retail customers is a significant matter that requires careful study, as it could substantially impact the financial system.

"The extension of digital currency use to retail must carefully consider its pros and cons and depends on the design. For example, China implemented it to replace cash, but the systems remain unchanged, with banks continuing to function as before, merely transitioning from cash to more token-based transactions. This matter is still uncertain and requires further design and study, which is a significant issue that must be studied alongside the use of digital currency with large businesses, but we are not saying we will kick off immediately," she added.

In the future, payments using digital currency will need to be made through wallets, which will enhance the convenience of various transactions, making them more agile. At the same time, it is believed that the use of this digital currency will differ from Bitcoin, as the digital currency in the form of the Thai Baht will be a stable coin, meaning it is asset-backed, stable, secure, and can be used as a medium of exchange, with reliability and stable pricing, unlike Bitcoin.

Regarding Facebook's plan to launch 'Libra Coin' and allow central banks from various countries to create digital currencies, this scenario is considered unlikely because Libra does not operate within the commercial banking system and has certain regulatory conditions, making it challenging to implement in the future.

Mr. Thakorn Piyapan, Chairman of Krungsri Consumer and Executive in Digital Banking and Innovation at Krungsri Bank, stated that if digital currency is indeed used for retail, it would be beneficial as it could reduce the use of cash and open up opportunities for the development of payment systems, including mobile banking and e-wallets, making them more widespread and efficient, while also providing traceability of funds.

"There is no need to worry about whether it will impact banking businesses, as payments and transfers are already partially moving from banks to wallets. What needs to be monitored is the backend system, to see how a central system will be managed and maintained," he added.

SOURCE : www.bangkokbiznews.com