Bank of Thailand Pilots ‘Crypto Baht’ Digital Currency Payment System
The Bank of Thailand is planning to develop a prototype to test its Central Bank Digital Currency (CBDC). The objective of the venture is to shrink transactional bottlenecks and processing times. The move will enhance business confidence and competitiveness while nurturing Fintech innovation in the country.
According to an official report, on June 18, 2020, the bank will test the CBDC blockchain payment platform with large-scale enterprises before doing the official launch. The bank has partnered with cement and building material manufacturer Siam Cement Group (SCG) and Fintech firm Digital Ventures Company Limited to trial the payment prototype system.
SCG inked a deal with Digital Ventures in 2018 to embrace its blockchain payments platform. SCG vice president Thammasak Sethaudom said that the move was in line with SCG’s visions of:
“Creating innovations to fulfill needs and rapidly changing customers’ behaviors, especially now with the ‘New Normal’ business landscape.”
According to the report, the project will roll out beginning July 2020 with the pilot phase with SCG scheduled to conclude by the end of the year. The bank intends to use CBDC payments to streamline its payment system.
BoT said it’s building the prototype to mirror Project Intathon, a combined CBDC payment project conducted by the bank and eight other financial institutions. They expect the seamless fund transfer system to expedite payment settlement between suppliers. Once they conclude the pilot scheme, the bank will gauge the system’s feasibility for the integration of CBDC payments into other business platforms.
Thailand joins a host of other nations that are aligning themselves to the “new normal” where paper money is viewed with suspicion due to Covid-19. As we reported recently, South Korea selected a task force to scout the possibilities of transitioning towards the use of CBDC should the use of fiat currency become untenable.
China, a country that has traditionally exerted influence over policy change in Thailand, is already a frontrunner in the development of CBDC. While it was previously being rumored that China is about to roll out is digital Yuan, it’s an open secret that China has continuously emphasized the significance of the CBDC. Thailand’s local currency, the Thai Baht (THB), is stable in the region, but all developments seem to point to popularizing digital currencies post Covid-19.