While most countries are adopting the transformation to the digital currency, a significant Asian country Thailand might have to wait for a retail central bank digital currency.
Governor of the Bank of Thailand (BoT), Veerathai Santiprabhob believes that plans to shift from cash to a digital currency will not be accomplished in the ‘next 3-5 years’. This is because the process of building a central bank digital currency (CBDC) ‘is not easy’ and also is time-consuming because of the complex nature of the monetary system.
Santiprabhob points out that the developing countries will find it difficult to succeed with regards to CBDCs and that it will take the next half a decade to do so. On the other hand, there has been impressive progress with regards to CBDCs in some developed countries. However, Santiprabhob did not discuss the risks factors of CBDCs.
With that, Bank of Thailand (BoT) has not revealed any plan to offer a retail CBDC. But, three months ago it declared that it was working on a wholesale CBDC.
Reportedly, BoT is already using the Corda distributed ledger technology platform to build the proof-of-concept prototype. The same technology would be used in enabling fund transfer from one local bank to another.
Additionally, BoT is leading A project called ‘Project Inthanon’, in which eight commercial banks are participating. The initial phase of the project is supposed to complete in March of next year.
Apart from that, Christine Lagarde, the head of the International Monetary Fund shared some insights about CBDCs, stating, “This currency could satisfy public policy goals, such as (i) financial inclusion, and (ii) security and consumer protection; and to provide what the private sector cannot: (iii) privacy in payments.”
Lagarde also talked about minus points of the state-backed digital currencies, noting CBDCs held the potential to stifle innovation. This is because with central banks providing a full-service solution that extended from the digital wallet to back-end-settlement services, a lot of fintech firms and other players in the sector would go out of business.