Digital Assets: Bank of Thailand Advances Its Central Bank Digital Currency (CBDC) to Third Phase
After local testing, the pilot digital baht (?) heads out overseas.
Bank of Thailand assistant governor Vachira Arromdee announced Wednesday, July 16 that the Thai central bank was moving to the third phase of development of its central bank digital currency (CBDC). (Bitcoin.com)
In a significant revelation, she said the bank was already using the Thai CBDC in transactions with some large-sized businesses.
According to Bitcoin.com, Thailand’s cement and building material provider, Siam Cement Group (SCG), and fintech firm Digital Ventures Company Limited participated in such testing.
Project Inthanon is a collaborative project of the central bank and financial institutions. It has the objective of developing and testing a proof of concept for domestic wholesale funds transfer using a CBDC.
The Bangkok Post said in 2019 that Phase II of the project had established the efficiency of bond trading and repurchasing activities, including coupon payments, interbank outright trading, and repurchase transactions, using distributed ledger technology.
Meanwhile, Arromdee said the Bank of Thailand will begin testing the Thai CBDC in transactions with the Hong Kong Monetary Authority effective September. This is actually Phase III of the project. It was originally to commence in August 2019 and complete by the fourth quarter.
Thai CBDC – Pros and Cons
According to The Nation Thailand, Arromdee agreed that the CBDC could be detrimental for commercial banks. That’s because it would eliminate their “middleman role.”
However, it would have a positive fallout because the cost of financial transactions would decline for consumers.
She also revealed that the Thai central bank was serious about rolling out the Thai CBDC for use by the general public. However, “a comprehensive study must be completed before taking such an action.”
Furthermore, Thakorn Piyapan, who leads the Krungsri Consumer Group in Thailand, has come out in support of the Thai CBDC. He said it would promote digital banking while reducing the cost and printing of banknotes.
Related Story: Bank of England Mulling CBDC
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