Thailand’s Central Bank Digital Currency (CBDC) has entered into a new development phase, after being used for transactions with some businesses, local news outlet The Nation reported on 16 July.
According to the publication, the Bank of Thailand (BoT) has already made financial transactions with a number of businesses using its digital baht. On Wednesday BoT’s Assistant Governor, Vachiara Arromdee, told reporters that the CBDC was entering into its third phase of development, and that the bank was looking to expand its use to even more businesses in the country.
Arromdee further revealed the BoT was not only planning to launch its digital currency for transactions with the Hong Kong Monetary Authority (HKMA) in September, but that it was also considering rolling it out to the general public as well. The country’s CBDC appears to be backed by the central bank’s currency reserves. Data from the BoT has shown that its foreign currency reserves have grown by more than $25 billion in the past twelve months.
Although expanding the use of the CBDC could potentially reduce the cost of financial transactions for the general public, Arromdee explained that the bank must first complete a comprehensive study in order to prevent a negative impact on commercial banks. The bank’s executive did however say that China’s public rollout of its digital yuan has not affected the financial system in the country so far.
Although China’s CBDC, also known as the Digital Currency Electronic Payment (DC/EP) system, still doesn’t have a launch date, the country has made phenomenal progress in its development. According to recent reports, three Tencent-backed companies have already held talks with the People’s Bank of China (PBoC) to trial its CBDC. The firms in question are a food delivery platform with 435 million users, Meituan Dianping, video streaming platform Bilibili, and the Chinese equivalent of Uber, DiDi Chuxing.
The Bank of Thailand first revealed its pilot project to test its CBDC back in June, when it announced a partnership with the largest building material provider in the country, Siam Cement Group (SCG), and fintech firm Digital Ventures Company Limited.