- The target of 10,000 users is kept by banks to focus on and take under consideration.
- A pilot program of the Bank of Thailand will ensure cross-border payments without earlier setbacks.
- Multiple CBDCs (multi-CBDC) will connect currency to the country’s jurisdiction.
The Thailand banks have revealed their plans to launch a testing project for a retail Central Bank Digital Currency (CBDC). It will work under a regulatory body starting this month. The project will involve up to 10,000 end users and will operate until August 2023.
The Siam Commercial Bank, the Singapore-based payments service provider 2C2P, and Bank of Ayudhya (Krungsri) have partnered with the Thai Central Bank on this phenomenal upcoming project.
Thai Banks Coming Together to Facilitate End Users
These associations have familiarized reliable applications to a mob of individual users, presenting QR code scanners and integrated wallets. Krungsri, in particular, plans to involve approximately 2,000 staffers in the testing stage alongside 100 merchants near the bank’s headquarters.
Likewise, the project will progress and include Krungsri’s Ploenchit branch. As per Sam Tanskul, Managing Director of Krungsri Innovate, The bank must design a “strategic approach” to differentiate the existing PromptPay service from retail CBDC. Siam Commercial Bank’s pilot program will work just like Krungsri, with the active indulgence of its staff and neighbouring retailers.
According to Banking sources in Thailand, it’s a full-fledged liftoff, highlighting that no authorized plans will deploy CBDC. The Bank of Thailand earlier started the action of a wholesale CBDC in 2018 and, since then, has been involved in significant ventures like the Project Inthanon-Lion Rock project in partnership with the Monetary Authority of HongKong and the Bank for International Settlements’ mBridge cross-border payment strategy.
Bank of International System (BIS) in Support of the Cross-Border Payments
BIS is the payment system supporting cross-border monetary flows. Heightened prices, low speed with transparency, and functional intricacies restrict the worldwide network of other banks enabling international payments.
Banks are also lessening their correspondent services and networks, leaving many participants including developing economies and markets requiring more reasonable access to the international financial system.
Multi CBDC arrangements that connect directly to the jurisdictional digital currencies in a coordinated technical infrastructure recommendation with significant prospect to enhance the current economic system and let the cross-border payments be affordable, instant, and universally unrestricted with a secured settlement.
The Bank of Thailand, the Digital Currency Institute of the People’s Bank of China, the BIS Innovation Hub Hong Kong Centre, the Central Bank of the United Arab Emirates (UAE) and the Hong Kong Monetary Authority are functioning jointly to make such a multi-CBDC platform called mBridge.
It will be a platform established on a new blockchain – ‘the mBridge Ledger’ – built by central banks for supporting peer-to-peer, cross-border, real time, foreign exchanges and payments transactions using CBDCs.
It also capacitates in ensuring adherence with legal requirements, jurisdiction-specific policies, governance needs and regulations. Actual corporate transactions are included here that are centred around global trade being run on the platform among partaking selected commercial banks, central banks, and their customers in jurisdictions.
mBridge Tailoring Mutli-CBDC Resolution Platform
mBridge displays that it is real to seek for a tailored multi-CBDC platform resolution to manage the constraints of today’s cross-border payment systems. Earlier project drawbacks and learning from the pilot will persist structuring and experimenting the technology while counting more on compliance, liquidity, and connectivity features.
So as to move the platform nearer to a production-ready system, it’s important for the project to excel. The project’s succeeding phases are also envisioned to contain further use cases and participants and additionally work on the governance legal framework.
Furthermore, in a move to strengthen the growth of the digital token industry, the Thai government ceded Corporate Income Tax (CIT) and Value-Added Tax (VAT) for companies issuing investment tokens in March 2023.