The Bank of Thailand has announced it will begin accepting public comments on its proposed Retail Central Bank Digital Currency (CBDC) development, bringing it in the league of apex monetary authorities including the European Central Bank (ECB) that has made such a move in recent times.
Per the report detailing the call for comments, the Bank of Thailand affirmed that it has unveiled its plans to develop the CBDC which will be the equivalent of a Digital Baht after noting the risks posed by the unbridled proliferation and growth of stablecoins in the country.
“Retail CBDC is a digital form of money issued by the central bank comparable to physical banknotes, and can be used in financial transactions both online and offline1. Moreover, Retail CBDC is easily portable and has the potential to be used in various innovative financial services,” the Bank of Thailand report revealed.
The monetary authority’s approach to the Retail CBDC development was made known to the media through Ms.Vachira Arromdee, Assistant Governor of the Financial Markets Operations Group, Bank of Thailand (BOT). The full report as given by Ms Vachira detailed the position of the bank in considering several risk factors as well as mitigating approaches towards the grand delivery of the Digital Baht.
The Bank of Thailand noted that its main objectives in “exploring Retail CBDC is aimed at providing 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, and contribute to the development of more diverse and innovative financial services.”
For those who wish to comment on the development, allowance to do so will be permitted until 15 June 2021.
The Bank of Thailand and the Purge of Stablecoins
The Bank of Thailand back in March sent out a warning against the use of stablecoins in the nation, particularly those pegged to the Baht fiat currency. Citing the growing use of the Thai Baht Digital (TBT), the bank expressed concerns about the potential for these private currencies to destabilize the nation’s monetary system.
“Although THT is not used as a medium of exchange, it could cause fragmentation of the Thai currency system should THT or other stablecoins come to replace, substitute, or compete with baht issued by the central bank. Such usage would ultimately affect the general public’s confidence in the stability of the national currency system, which is the cornerstone of all economic activities,” the BoT said.
The stance against stablecoins and the plan to begin penalizing those using it is a viable way to clear off competition ahead of the scheduled rollout of the official Digital Baht CBDC